| |
| |
|
|
|
Credit Card Debt: How to Get Rid of It
This method is simple, but requires some discipline. First, you have to stop any new spending on your cards. Second - you'll need to examine all of your spending. You'll need to know how much extra money you'll be able to put towards paying off your cards. Credit card companies generally determine the minimum payment to be 2 - 2.5% of the outstanding balance. So if you owe $1,000, for example, your minimum payment will be 20 - $25 per month. Some part of that $25 goes to the interest on the balance, some to pay off the actual balance. How much goes where depends on the interest rate. Your credit card statement will give you the exact numbers. Let's say that $20 of the $25 goes to the actual balance. To pay off $1,000 at $20 per month will take 50 months. Just over four years. You'll also have paid $250 in interest alone. Here's how you pay them off: Look at the interest rates on all your credit cards. Take the one with the highest rate. That's the one you're going to work on first and we'll call it card #1. After examining your spending you may have found some money to put towards your payments. All of this extra money to pay off your card debt goes to this one card. The idea is to pay as much extra to card #1 as you can. Until it's paid off. Pay the minimum balances on all the other cards until card #1 is done. Then take the card with the next highest interest rate and add to its payment the total of the payment you were making to card #1. In other words, send the regular monthly payment you used to send for card #1, plus any additional amounts that you used to pay on card #1, plus the monthly minimum for card #2- all to card #2. Do this until card #2 is done. Then take the total you were paying to cards #1 and #2 and add that to the payment on card #3, and so on. Here's an example: Let's say you have four, maxed out, credit cards. Each with a balance of $5,000 ($20,000 total.) Say the minimum payment on each card is $100 (yours may be different) making your monthly minimum payment total $400. Now let's say you have $500 per month to pay these off, which you found through analyzing all your spending. Card #1 has the highest interest rate and you'll send $200 per month to that card and pay the minimums ($100) on each of the others. And you're not adding any new spending. The extra $100 you're sending in to card #1 goes to the actual balance of the card, not the interest. This will let you pay that card off a lot faster. You might be able to kill this card in two years, instead of 5. Eventually, card #1 is dead. The entire payment, $200, that you were making to card #1 gets added to the payment on card #2, for $300 total. ($100 minimum plus the extra $200 from card #1.) The balance on card #2 will be less than $5,000 since you've been making your minimum payments all along. Adding the $200 from card #1 to the payment of $100 that you've been making to card #2 will make this card go away much faster than the first card did. When card #2 is gone you take the $300 per month that you were paying to #1 and #2 and add it to the payment on #3, which will now be $400/month. When #3 is done you repeat the procedure for card #4, but now you're sending the whole $500/month to that one card. Obviously this system will take years, but at the end of that time you have: * Four dead cards (hopefully you cut most of them up,) * Spending and budgeting discipline earned from going through the whole process, and * $500/month to put into a savings account or where ever. Good luck! Greg has a degree in biology so, naturally, went into teaching martial arts. Now he builds websites on whatever topic happens to be of interest. For more articles on easing your credit card debt, visit Credit Card Debt Help.
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Are You SURE Your A Bad Debt? Many people who seek the advice and guidance of debt counsellors are driven to them in the first place by fear and ignorance - two powerful emotions which often mask the real scale of the problems.In many cases, what you made have been led to believe is a 'bad' level of debt, may instead need only some careful reorganisation and a new set of mortgage priorities. Dealing with Thingitis Debt is quickly becoming an epidemic in America. However, through the past 50 years, America has not seen such large domestic growth. Bankruptcy - The New Scarlet Letter Nathaniel Hawthorne's book The Scarlet Letter states in Chapter 2, "On the breast of her gown, in fine red cloth, surrounded with an elaborate embroidery and fantastic flourishes of gold thread, appeared the letter A." The letter A stood for the word adulterer and represented one of the worst insults in society. Eliminate Your Credit Card Debt, But How? Can a debt consolidation loan eliminate your credit card debt? A consolidation loan might (or might not) be the key. There are several things you must consider when making the choice to consolidate debt using a debt consolidation loan. Learn The 15 Debt Elimination Steps You Must Take Immediately! What Everybody Needs To Know.. IVA Advice An IVA (individual voluntary arrangement) is an alternative to bankruptcy introduced by the government as part of the Insolvency Act 1986. This article provides an overview of IVAs and suggests what readers should watch out for when looking for IVA advice. Is It Possible to Be Sued For My Debts? It is possible for creditors and third-party collection agencies to use legal means as a way to collect debts. The likelihood of being sued or having your wages garnished depends largely on the creditor that is owed money. Life After Debt - Strategies for Dealing with Problem Debt Honorably and ethically rid yourself of burdensome debts using the little known Negotiation Strategy, without having to experience the loss of control and privacy associated with filing for bankruptcy, consolidation, or credit counseling.The inability to reduce debt and saving money are the two biggest obstacles preventing Americans from living financially sound lives. How to Deal with Bill Collectors So you've screwed up. You're drowning in debt. The 7 Secrets to Getting-and Staying-Out of Debt As vice president of the American Credit Foundation, a nonprofit organization that helps individuals and families manage their debt, Mike Peterson knows firsthand how financial problems can wreak havoc in one's life. Each day, counselors at the Midvale, Utah-based foundation help desperate clients dig themselves out from under piles of unpaid bills, stern notices from collection agencies and ominous foreclosure threats. Debt Relief -- Why Most Programs Have A 75% Failure Rate Debt consolidation, equity loans, credit counseling, debt management plans, even Chapter 13 bankruptcy - it doesn't matter which of these debt programs you're talking about. They all suffer from one fatal flaw, the number one problem that causes most people to fail at eliminating their debts through these techniques. UK Debt When Moving Abroad The idea of moving abroad to escape debt seems to be more of a common practice these days. People with failed businesses or swamped in debt seem to think moving abroad will give them a fresh start, free from debt and allow them to build a new life. How to Protect Yourself: Debt Collections So you are getting collection calls? You're desk is full of unpaid bills. You dread answering the phone. Debt Consolidation and Personal Finances: Learn the Truth! An inability to manage credit, growing debt and bankruptcy are all major problems today. On an average day, over 8,000 people file bankruptcy in the United States alone. Stop Debt Collectors Can you stop debt collectors ? . . Debt Negotiation and Debt Settlement Debt negotiation and settlement can give you a drastic reduction in the amount of debt you owe and allow you to repay your debts in a much shorter time. Resolving your debts is important to your well-being and financial stability. Secrets to Why Debt Reduction is So Vital for Your Financial Health Living with debt is never a good idea if you want to make long-term financial plans. Every cent you use to service debt is money that could have been invested in your future. Debt Free and Carefree Are you still clearing a mountain of debt amassed last Christmas or even during last year's summer holiday?For those of you who make financial plans, who budget and save, you can skip this article. For those who get a little carried away, who regularly spend more than they can afford, this article is for you. Reducing Debt Before Its Too Late - How to Avoid the Pitfalls of Creeping Debt Reducing debt usually isn't a high priority for people until they have already gotten into trouble with overspending. Using a few basic guidelines, and debt calculations, can help you see when your debt load is getting into the danger zone. Debt and Your Dreams You may not realize what that credit card bill is doing to you?Bob is a 27 year old truck driver. He dropped out of college after one year and got a job.
|
| home | site map |
| Copyright 2009 - All Rights Reserved Net-resources.org |
