Are you trapped into making only minimum payments on your credit cards? I hope not.
Minimum payments decline as the balance on the credit card declines.
Let's take a credit card with a $2000 balance at 15% interest to use as an example. You would expect to pay about a $40 (2%) monthly payment when you start making your payments:
By making the minimum payment only, it will take you 13 years and 11 months to pay off your credit card and you would expect to pay $2,126 in interest.
However, if you continued paying that $40 until the credit card was paid off, it would only take you 6 years and 6 months to pay off the credit card and you would pay about $1,100 in interest.
You could save over $1,000 in interest and pay it off in half the time. This is what simply starting with a set payment and sticking to it could save. If you can afford that $40 payment when you start, odds are it won't hurt you later.
Now, let's take that a step further. What if you paid just $10 more, $50 instead of $40?
That same credit card could be paid off in 4 years and 7 months with only $740 in interest.
Here is how it breaks down:
| Minimum Payments | - $4126 total payments | - 13 years 11 months |
| Paying $40 per month | - $3100 total payments | - 6 years 6 months |
| Paying $50 per month | - $2740 total payments | - 4 years 7 months |
The fact is that every dollar you add to your payment goes toward the balance of the credit card.
I recently completed a Debt Elimination Summary for a couple that had $46,500 in credit card debt on 6 credit cards. Most people would be considering filing bankruptcy in that situation but this couple were determined to pay it off.
Here are the results of the Summary:
They were already paying $785 per month on the credit cards. They decided they could afford to pay another $200 to eliminate their debt sooner.
Would you have thought that you could pay off over $46,000 in credit card debt in just 5 years and 8 months? I've seen this done dozens of times. It can and it does work if you stick to it and quit using your credit cards.
If you have multiple credit cards and would like to pay them off as quickly as possible the best way to do this is to write down your credit card name, balance, interest rate and minimum monthly payment.
Then you must decide which credit card to pay off first. There are two schools of thought on this. Most experts believe that you should pay off your highest interest credit card first. You would definitely pay less in the long run.
However, if you need to see results quick to give you an incentive to keep going you could start with the credit card with the lowest balance.
Whichever way you choose, simply add as much money as you can spare to that credit card until it is paid off. Then take the amount you were paying to the first credit card and add it to the next credit card payment and so on until they are all paid in full.
Interest, late fees and penalties are wasted money. The only way to avoid this is to use cash to make your purchases when ever you can.
When it comes right down to it, there are very few situations in which bankruptcy has to be the answer. Often times, when it comes to debt issues, unsecured debt consolidation loans are much less damaging answer than bankruptcy. What is important, though, is that you understand what it is about before you dive in and what your alternative debt consolidation options are.
Unsecured debt consolidation loans are personal loans, and as
the name implies, they are not secured. What that means is the
loan has no collateral or physical items, backing it up. The
only collateral is you, the borrower. Because banks then see
unsecured debt consolidation
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Do you have multiple debts? Do you have just one large debt which you could afford, but your circumstances have since changed? Are you finding it harder each month to meet the payments on your debts?
You know debt is a problem, but maybe do not have any idea what the best way out is. Financial problems rarely just go away, so a solution of some beneficial sort is needed. Otherwise the problems just keep piling up and eventually overwhelm you.
While there may not be any instant debt solution, there are a
number of things that can be done. Some of those things that
can help you, apply across
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Normally, when you're looking to consolidate credit card debt you have the following options: get a debt consolidation loan -or- apply for a home equity loan. But if your credit card debt is still manageable, you may want to consider consolidating your balances to a 0% APR credit card instead. Using a 0% APR credit card will help you spend more money paying off your balances, and less on interest charges!
To use a 0% APR credit card to pay off your debts, follow these steps:
Is credit card debt driving you crazy? Spent too much this holiday season?
Well, you’re definitely not alone. Credit card debt is a way of life these days. Especially now, right after the holidays!
For many people, money gets REAL tight this time of year – we need to pay for all the holiday gifts, get ready for tax season…
Ahhhh!
What can you do if debt has taken over your life?
Here are 6 simple tips for getting out of debt. Keeping a New
Year’s Resolution is difficult. But
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If you once have been caught in the debt trap, how do you come out of it and be debt free? We are different and each of us has our own lifestyle and our own financial state, so the way to debt elimination is different from person to person. One plan will be good for some, but not for others. You have to be certain that the plan you choose, whether it is debt consolidation or another plan, will be the best for you with regard to saving both time and money.
A debt counselor has debt
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