Credit cards are great.  You swipe them through the convenient little readers at the checkout and you don’t even have to worry about how much you’ve spent – until the bills start rolling in, that is!  Most people get their first credit card right out of high school, and use it with the intention of building a credit history.  Before long though, the purchasing power goes straight to many people’s heads and suddenly there is a few hundred or thousand dollars in credit card debt to deal with.

 As you begin making credit card payments, you might send a few dollars over the minimum payment required.  Then as you charge more and the minimum payment increases, you start sending just the minimum, because it seems to be all you can afford.  Even when you pay the minimum amount before the due date, the credit card interest can cripple you.  Considering that many credit cards are charging 15% or more, you can bet that most (or all) of your minimum payment is only going towards the interest, so despite making a monthly payment your total debt is actually growing larger month after month. Here’s how to end the cycle and get out of credit card debt:

 Stop Spending: First thing you need to do is stop using your credit card(s).  This can be very difficult if you’ve gotten into the habit.  Cut it up into tiny pieces, put it in water and freeze it – do whatever it takes to stop using it. 

Pay Twice a Month: Figure out how much you can afford to send to the credit card company each month, and then schedule your payments so you are paying half the total amount every 14 days.  If you send $120 a month, you send $60 first, followed by $60 in 14 days.  This allows you to make two extra payments per year without really planning it.  The extra payments go towards the principal balance.

Transfer the Balance:  If you are eligible, you should look for a balance transfer offer on a credit card with 0% interest for the life of the balance.  These are harder to come by these days, but great if you can get one.  If not 0% interest, an interest rate that is fixed and lower than the rate you are currently paying can save you hundreds of dollars and make it easier to pay off your bill since more of your monthly payment is going toward the current balance.

• Using Balance Transfer Offers To Your Advantage
• Credit Card Disability Insurance Only Helps Credit Card Companies
• How and When To Get Rid of Private Mortgage Insurance (PMI)
• Benefits of a Debt Free Lifestyle
• What is PMI and Why Do You Have to Pay it?

This entry was posted on Monday, February 9th, 2009 at 1:24 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.