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:

Debt Recovery Can be Easy

OK, so you are up to your head in debt.... Read More

The 5 Secrets to Getting Out of Debt Fast

As they stare down at a teetering pile of bills,... Read More

Debt Elimination

If you're reading this article right now I'm sure that... Read More

5 Methods Toward Reducing Your Debt

Decreasing your debt is paramount to having a good credit... Read More

The Bankruptcy Code Acknowledges the Validity of the Homestead Exemption

Many times the subject of bankruptcy seems baffling in its... Read More

Is Independence Overrated?

Happy Independence Day from The Money Motivator!If you don't celebrate... Read More

Are You Beating Up On Yourself About Debt?

When you hear the word "debt", whats the first thought... Read More

Save Money When Going Out

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

The ONE Law You Should Be Breaking

There is a law all smart people break.Parkinson's law.Parkinson's law... Read More

Debt Collectors; And what you can do to Get Them Out of your Life

FTC opinion letter on validation Section 809(a) of the FDCPA,... Read More

What is Debt Settlement and How Does it Work?

Debt settlement involves negotiating with a creditor or creditors to... Read More

Tips For Saving Money

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

Purchase Your Future Now While It Is Still Inexpensive

Leaving school, getting a new job, or even a raise... Read More

Debt Settlement

What is debt settlement?Debt Settlement is a process to settle... Read More

Eliminating Credit Card Debt

The overwhelming task of eliminating your debts can often seem... Read More

4 Simple Ways to Solve Your Debt Burden

Getting Behind Getting behind on your debts owed can be... Read More

New Bankruptcy Law Will Not Protect You from Identity Theft

Recently passed by Congress with overwhelming support, the oddly-named Bankruptcy... Read More

A Debt Elimination Process Must Be Initiated From You.

The first and maybe most important step in a debt... Read More

New Bankruptcy Law ? Targeting the Wrong People?

Last April, President Bush enthusiastically signed into law the oddly-named... Read More

How to Protect Yourself: Debt Collections

So you are getting collection calls? You're desk is full... Read More

Personal Bankruptcy: Last Option To Legally Stop Bill Collectors

Do you have stacks of unpaid bills?Are you in debt?Are... Read More

5 Ways to Get Out of Debt

It has been said that everyday more and more people... Read More

Debt Consolidation and Personal Finances: Learn the Truth!

An inability to manage credit, growing debt and bankruptcy are... Read More

Debt Help and Advice for the UK

At some time or another during our lives most of... Read More

The Effects of Consumer Debt

Consumer Borrowing Consumer borrowing in the UK has now crashed... Read More

new led light bulbs walkway lighting Pete's produce ..