Wednesday, March 01, 2006

Do you know how long it is going to take you to pay off your credit card debt?

Do you know how much credit card debt you have?

Do you want to pay it off and have money to invest?

Time to do something about it. You need to take the following steps of action in order to find out your total debt and start paying it off:

1. Call each company that you have a credit card with and find out what the balance is on the card. (If you can do this online feel free to do so)

2. While on the phone find out what the interest rate is on the card. (You usually can't do this online)

3. Add up the total from all of the companies and write it down in large print on a full size sheet of paper.

4. Tape this paper up some where that you will see it several times a day.

5. Set a reminder in your cell phone that shows you how much debt you have and goes off once everyday.

6. If the interest rates on your credit cards are all fairly close (within 5% of each other) you will be paying off the card with the highest interest first. If you have a card that has interest much higher you will be paying that one off first. (Look for an article soon on how to lower your card's interest rate) Use a loan calculator to determine how much you should pay each month and how long it is going to take you to pay off the card. To use this, first put in how much money you owe on the card, and then what interest rate you are paying. For the term, it really depends on how much you owe and how much you make each month. You should use half of your pay each month to pay this card off, so play around with the term to figure out how much you need to pay each month and how long it is going to take.

7. Now, what should you do with the other cards while you pay that one off? You of course still have to pay money to them each month, but how much? I would say pay the minimum plus at least $15. If you can't afford to pay more than the minimum, then don't! Do not get behind on payments however, this will destroy your credit rating.

8. Once the first card is paid off, repeat steps 6 and 7 until all of your debt is paid off!

You should be able to get yourself completely debt free in less than 5 years. Yes I realize that 5 years seems like forever, and it isn't worth it to get out of debt if it is going to take 5 years, but either you start towards getting out of debt today or you will be in debt forever.

Make sure you update the "how much you owe" sign that you have posted each month so that you can visibly see you are getting out of debt. If you don't know how much you owe, you will never get out of debt.

Take action today!


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