HOW TO REDUCE YOUR CREDIT CARD DEBT NOW - REPOST

Many people have asked for additional information on how to Dump Debt now, so I thought I would take the time to repost this blog entry.

Randall

There are several things you can do to reduce your credit card debt. To reduce your credit card debt effectively, here is one solution I highly recommend. First, gather all of your credit card debt information. (This includes MasterCard, VISA, Discover, American Express, Diners Club, all store charge cards, etc.)

Now list the total amount you own on each card. Next to the balance owed list the interest rate of each card. Here’s an example:

Card        Balance       Interest Rate
Visa         $2000               11.9%
Sears       $1000               22.9%
Discover  $  700                 7.9%

Once you have done this you’ll have a better overview of what your credit card debt picture really looks like. Now add one more column to your chart. Add a column for your minimum payment. Again, here’s an example:

Card          Balance          Interest Rate      Minimum Payment
Visa            $2000                11.9%                  $20
Sears          $1000                22.9%                   $40
Discover      $ 700                  7.9%                   $14

With this completed you now know exactly how much your minimum payment debt load is each month. Now take a look at your monthly budget and see how much more you can pay on your credit cards per month.

To make this simple let’s take the example of the Visa card debt from above. You owe $2000 and your interest rate is 11.9%. If you only paid the minimum of $20 per month it would take you 348 months or 29 years to pay off, assuming you never charged anything ever again on that card. That’s right. You could have a child, send them to college, have them become a successful business person and you still won’t have your Visa card paid off.

Now if you can double your minimum payment to $40 on the Visa card you will pay off the card in 69 months or just under 6 years. That’s still an amazing amount of time, but look at the difference and extra 20 bucks makes!! If you can pay more than the minimum on every card, you should, because it will save you hundreds or thousands of dollars in interest charges. If you cannot pay twice the minimum on all your cards, pay as much as you possibly can on the highest interest rate card first and when you pay that off, take the money you were paying the highest rate card and apply it to the next highest rate card. This "domino effect" really can chop your debt faster than you realize.

No matter what, don’t get behind on your payments to any card issuer if you can help it. If you know in your heart and in your checkbook that you are falling behind, stop using your credit cards immediately and contact the card issuer and see if you can work out a payment plan. You will ding your credit doing this, but it is better to work out the problem with the credit issuer than it is to stop paying or declaring bankruptcy. Don’t forget that you can call you credit issuing companies and negotiate better interest rates, which will also help in controlling your debt.

I am yours in success,

Randall

Comments

[debt consolidation]

Credit card debt is a problem for many people and is a major contributor to personal debt. Funding your lifestyle with a credit card is easy but the hard part is paying it off and clearing the debt.

[promotional card printing]

HI

I think it is the policy of every bank and we did not say in this matter.