Drug testing

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.

limousine chicago service
In The News:

Life After Debt ? Strategies for Dealing with Problem Debt

Honorably and ethically rid yourself of burdensome debts using the... Read More

Mr. Cheapies Frugal Budget Tips

So you feel like a hamster spinning your wheel? The... Read More

What You Should Know About Bankruptcy

Filing bankruptcy is not only a last resort legal action;... Read More

Budgeting and Debt Management

Debt management (specifically unsecured) is the first step to taking... Read More

Use A Debt Checklist To Examine Where You Are

A Debt Checklist allows you to look at items and... Read More

Credit Counseling ? Signs That You May Need Help

Credit counseling is a viable option for those who are... Read More

Five Major Ways to Save Money

There are two main roads to improving your personal finances:... Read More

Debt Settlement : What You Need To Know

Debt Settlement companies work with your creditors to help you... Read More

Save Money When Going Out

It seems as though whenever we go out for the... Read More

You Can Make Financial Resolutions Anytime

The New Year often brings with it a desire to... Read More

Debt Handling Solutions

Sometimes debt can seem overwhelming. In those instances, or even... Read More

Christian Debt Consolidation ? Feel Comfortable About Managing Your Debt

Many Christians feel uncomfortable with the notion of being in... Read More

Budget the Luxuries First!

Strictly speaking, his advice was preceded by another Heinlein maxim... Read More

Tips For Saving Money

Still living from pay to pay? Or envying those great... Read More

British Families and Debt

There is current concern from the Bank of England that... Read More

Should You Join a CCCS - Consumer Credit Counseling Service for Debt Relief and Financial Freedom?

Do You Need to Join a CCCS - Consumer Credit... Read More

Debt Elimination 1

If you have multiple debts, you may well be wishing... Read More

Are You SURE Your A Bad Debt?

Many people who seek the advice and guidance of debt... Read More

Debt Consolidation Versus Debt Negotiation

Debt consolidation versus debt negotiation are two options that are... Read More

Top Ten Reasons People File for Bankruptcy

1. Eliminate the legal obligation to pay many of your... Read More

Hide That Car! Fighting the Repo Man

Vehicle repossession may appear justified in circumstances where a person... Read More

Debt Validation: Do you have to pay ?

It happens all the time. Debt collectors try to collect... Read More

Help for the Single Mother with Managing Credit and Debt

Today's consumers benefit drastically from the usefulness of credit. Credit... Read More

What Is A Chapter 13 Bankruptcy?

Many consumers that are bogged down in debt frequently turn... Read More

Is Debt Negotiation Bad?

Educating yourself about the ins and outs of debt negotiation... Read More

garage lights flood light led Pete's produce ..