to Eliminate Credit Card Debt
you are like most Americans you probably have credit
card debt. How much credit card debt do you have?
The average is over $6,000! Yours may be higher...way
higher! It can be downright depressing. Certainly
paying the minimum required payments is not going
to eliminate credit card debt balances.
are some tips that you can use to help you eliminate
your credit card debt:
payments above the minimum required payment. If
you pay just the minimum, it is not uncommon to have
a credit card balance take over 20 years to pay off!
Making just small payments above the minimum will
help to slowly reduce your credit card balance.
miss a payment. Ever! Most credit card companies
love it when you miss a payment! Why? Because they
have stipulations in their card agreement with you
that typically bumps your interest rate way above
what is probably an already high rate. I checked the
card agreement with one of my cards and if I had a
payment that was late, my rate would go from 9% up
to 23%! Talk about expensive!
to pay the higher interest balances first. These
are the cards that are costing you most in interest
costs. When you pay off a card, take the money you
were paying on the card that was just paid off and
start applying it towards the next card. Hopefully,
you can pay ever larger payments towards each successive
card as you pay each card off.
your credit card balances. If you are able to
get a loan with a much lower interest rate, you
might want to consider a consolidation loan. For
example, you could take out a home equity loan at
a rate of let's say 8.5%, use it to pay off your
credit card balances that are charging you 18%.
A debt consolidation loan will help you eliminate
credit card debt much faster because less of your
money is going to finance charges and more of it
is going towards principle payments.
- This is exactly what I did and it is amazing how
much easier faster and easier it is to pay down
your credit card debt. You also only have to make
one payment every month!
use your credit card if you can help it! The last
thing you want is adding to your credit card debt
at the same time you are trying to reduce it. Use
a debit card. Write checks. Pay in cash. This is an
often overlooked tip. It helped me reduce my balances.
take cash advances on your credit card. The interest
rates on cash advances are typically much higher than
the rate on standard purchases. Not only that, when
you make extra payments on your card, which balance
do most credit card companies apply the principle
towards? You can bet its not the cash advance balance
with the higher rate. They save the best for last
when it comes to paying your balance, so they can
charge you the higher rate as long as possible!
down your lifestyle. This is probably one of the
reasons you have a high credit card balance to begin
with because you are spending more than you earn!
Try to live within your means. The money you save
should be put towards your credit card balances.
each card is paid off, should you cancel it?
is really up to you. If you have a problem resisting
the urge to use your credit cards, cancel them, cut
them up, thrown them in the fire, whatever you need
to do to stop using them, do it!
are the advantages to keeping your card active,
but with a very small or zero balance? This can help
improve your credit
score because the formula used to calculate your
score takes into account how much debt you have in relation
to the credit limit. The lower the debt to credit limit
the more this helps increase your credit score.