Archive for September 14th, 2009

Five Easy Steps to Credit Card Debt Elimination

Monday, September 14th, 2009
Max Anderson


For many consumers, credit card debt elimination can seem like mission impossible. When you’re thousands of dollars in debt and trying desperately to find a light at the end of the tunnel, the outlook can be quite bleak. Fortunately, no one is beyond help when it comes to breaking free from credit card debt. Here are five easy steps that will have you on the road to credit card debt elimination in no time.

1. Get All of Your Credit Card Statements Together

If you’re serious about credit card debt elimination, the first thing you need to do is gather all of your credit card statements together and begin creating a “debt elimination” spreadsheet.

What’s going to go on this spreadsheet? You’ll want to note how much you owe on each credit card, the interest rate and whether that rate is an introductory teaser rate or a long-term rate. If any of your credit card rates are currently on an introductory time line, make note of when that rate will expire and what it will go up to when it does.

2. Figure Out How Much You Can Afford Each Month

Once you know exactly where your debt stands, it’s time to form your game plan. This is critical if you want to pursue credit card debt elimination in the quickest and most efficient manner possible.

First, take a look at how much you can afford to put towards your debt each month. Add up all of your monthly expenses (not including the minimum monthly credit card payments you must make). Take all of your other expenses (include rent/mortgage, car payments, insurance, gas, groceries, utilities, phone, etc.) and add them up.

Once you have your monthly expenses added up, deduct them from your income and see how much you have left over. Take as much of that amount as you possibly can and put it towards your credit card debt elimination plan.

For instance, let’s say you have $400 a month left after all of your monthly expenses have been paid. Take $350 of that (leave $50 for emergencies, etc.) and put that towards paying off your credit card debt.

3. Addressing Your Minimum Monthly Payments

The next step towards credit card debt elimination is adding up all of the minimum monthly payments for all of your credit cards. For instance, if you have three credit cards, all with a minimum monthly payment of $75, your total minimum monthly payments would be $225.

If your credit card allocation were $350 each month like the scenario we outlined above, you’d be in okay shape so far. However, if your minimum monthly payments were $400 and you could only afford $350, then you have a serious problem and you need to start cutting out expenses. This may mean turning off your cable till you’ve achieved credit card debt elimination or foregoing your Starbucks runs, but it will be worth it in the long run.

4. The Plan of Attack

Now that you know exactly how much debt you have and how much money you can afford to pay off that debt each month, it’s time to form your plan of attack.

First, take the total of your minimum monthly payments and subtract it from what you have allocated towards credit card debt elimination. So if you have minimum monthly payments of $225 and a credit card debt elimination allocation of $350, your remaining balance would be $125. Take that $125 and apply it towards the credit card with the highest interest rate.

Once the credit card with the highest interest rate is paid off, you’re going to take the money you were paying towards that card each month (in this case, it’d be the $125 plus the $75 minimum monthly payment) and pay that $200 towards the card that now has the highest interest rate in addition to the minimum monthly payment. Keep repeating this process until you have achieved total credit card debt elimination.

5. The Fruits of Your Labor

Once your credit cards are all paid off, take half of what you were paying towards your debt and put it into a savings account. This will help you avoid having to rack up credit card debt in the future.

What are you going to do with the other half? Take that half and apply it to the things you were doing without while pursuing credit card debt elimination. After all, once credit card debt elimination is achieved, you do deserve to treat yourself.



Jakob

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How To Deal With Credit Card Debt: All About Credit Card Consolidation

Monday, September 14th, 2009
Mario Churchill


It is a fact that handling too many things at the same time can be very confusing, tiring and sometimes, can be very dangerous. Everything from work, relationships, or family can be very difficult to handle at the same time. It literally takes away your focus and often results in making you less efficient.

In credit cards, having too much of it is very dangerous. It is found that an average person carries about seven credit cards and all of which are actively being used. Managing these much credit cards can be a very hard task to do.

For example, if you actively use all of your credit cards, it can be very hard for you to keep track of all the credit card expenses you make. You should be aware on how often you use each of the cards and also the varying interest rate of each credit card. Most people realize that it is very important to keep track of all the credit card expenses a little too late. People often go into a considerable amount of debt without even knowing it.

It is a fact that credit cards are one of the most useful things you can have and can be a very convenient tool in emergencies. However, you need to know that the possibility of getting into debt when you use a credit card is very real.

When you go into a considerable amount of debt in credit cards, there are solutions that you can do to pay it all off. One example is to do credit card consolidation. Credit card consolidation is basically transferring all the debts you incurred in your other credit cards and pay it off through a single credit card with a low interest rate.

Credit card consolidation can relatively give you a lot of advantages when it comes to paying off your other credit card debt.

-Payment Manageability – Since you will be paying your other credit card debt with a single credit card, this will help you keep track of your payment bills in a much more effective way. Also, this tends to decrease stress and worries than receiving a series of bills.

-Lower Interest Rates – Different credit cards means different interest rates. By transferring your other credit card debts into a single credit card with the lowest interest rate, you can be sure that you can stop accumulating more debt through higher interest rates from other credit cards.

To start consolidating your credit card debt, you first need to look and compare the interest rates of your credit cards. If it is the same, you don’t need to consolidate your credit card debt. However, if you found a credit card with a lower interest rate, you can consolidate your credit card debt into the credit card with the lowest interest rate.

The best solution to all of this is not getting into debt at all. Getting into debt can be a very frustrating and unpleasant experience. Always remember that credit cards should only be used for emergencies. It should be used only when you need to use it and not when you want to use it. If you use your credit card to pay for utility bills, for food and other primary needs, you may need more than credit card consolidation to handle a credit card debt.

If you do get in debt however, you can always consider credit card consolidation as a way to pay it all off without worrying too much.



Allison

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