Monday, January 13, 2014

Seven Easy Schemes to Clear Off Debt from Credit Cards

Credit cards Français : Cartes de crédit Itali...
Credit card debt, this is one of the main problems that common people face concerning their finances. Having credit cards are tempting, these can make you spend more than what you actually earn. Excessive use can lead to more bills to pay with crippling interest rates and finance charges; making impossible for others to get out of debt. There is no automatic remedy for credit card debt but there are few steps to take in order to become debt free.

All you need is planning and budgeting, sooner you’ll find yourself getting out of credit card debts even faster than you can imagine. Study these seven steps to be able to pay your credit card bills sooner.

1) Make a list

List down all your credit cards, outstanding balances, interest’s rates, and required minimum payments. Do this so that you can easily track down your total debt.

2) Arrange from highest to lowest

The bill with the highest interest rate must be at the top, and so on, making the lowest at the bottom.

3) Calculate the total amount

Compute for the total amount of minimum payments billed for each card. So you will know how much monthly budget you’ll need for credit card payment amortizations.

4) Set a priority payment

Although there is a minimum amount being set for minimum payment, you must still desire to pay debts faster. In order to clear debts quickly, add extra payments for each credit card due.

5) Pay off one at a time

Clear off one credit card bill faster. Begin from the number 1 on your list because higher interest rates will cost more bill amount. This means, pay more than the minimum amount if you have extra cash.

6) Create a payment pattern

Continue doing this process up until the first credit card debt is paid off. Once it’s cleared continue with the second card but follow whatever amount you paid with the first one.

7) Repeat steps 1-6 until all your credit card debt have been paid off

It is important to understand how minimum payments work. When your total bill decreases, your minimum payment also decreases. That is why; it would take many years before you can actually clear off your debts if you will just stick to paying the minimum amount. So, the secret is to always increase your payment. Make it double or triple the amount. Just ignore the required minimum amount, stick to your plan. In less than a few months, you will notice that you finish paying credit card debts one at a time. Although this process will take time, be patient enough because it might take months or years before you can say you’re debt free. If you want to speed up the process, you can pay all of your debts whenever you have much money. You can also avail of balance transfers. These usually have smaller interest rates.

While credit cards exist, debt also exists. If you will only exercise self-control and practice paying debts on time, you may not go wrong in using your credit cards and not be worried of debts anymore.

Claire Reed is a finance writer for Claire Reedif is always online. If you have any questions, please, let him know!

1 comment:

  1. Yep! Lists are the best for getting things done like that. Great, great advice. I will tell my friend to do this!


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