What is the easiest way to pay down credit cards?
I have 6 credit cards. The limits are not too high, but they are all about maxed out. As the economy is so bad and I do pay more than the minimum each month, I still cant seem to get the balances down. I have a perfect rating with each one. Never late, never over the limit, but I cant get a credit increase and I cant get my interest rate lowered. What is the easiest way to pay them down? Any suggestions are greatly appreciated.
Tags: Cards, Credit, Down, Easiest
Make double payments on the cards with the highest interest rates and when you get them down to zip start double payments on the next highest interest rate cards and so on till you pay them off.
The best way to not use a card is to leave it at home. If you carry it you will find an excuse to use it.
This system works. It is the system my wife and I are currently using:
Pay the minimum on the five cards you have with the lowest interest rate. Then, put everything you can afford toward the card with the highest interest rate. After paying off the highest interest card, do these two things:
1. Find and apply for a zero percent interest card for balance transfers. Then, if you get approved, transfer as much card with the fifth highest interest rate as you can.
2. Continue to pay the minimum on the four lowest cards and put everything you can afford to pay on the highest rate card.
After doing this for 6 to 12 months you will see your debt really come down. This is the fastest, most responsible way to get rid of your debt. The key is sticking to the plan and putting as much as possible to the card with the highest APR.
NOTE: Always read carefully when applying for zero percent promotions. Sometimes their are hidden fees.
To keep your credit in good standing keep doing what you are doing. Don’t consolidate or go through credit counseling. And don’t try to borrow your way out of debt. What you really need to do is stop living above your means. That is what you were doing if you maxed out your credit cards and then could not afford to pay them right back. You were buying what you could not afford. Discipline yourself and take control of your money. Write a budget and follow it. Budget only for essentials and a bare minimum for spending. Cut out on extras and luxuries (and be honest about needs vs. wants) Devote all else to your debt. Make minimum payments on all the cards on time except for the card with the smallest balance. On this card, put every extra penny you have or can get through selling things or taking on an extra shift, etc. When that bill is gone move to the second smallest and just continue to dedicate yourself to paying everything off. Of course this will work a lot better if you STOP using credit for anything. Honestly, you should just cut them up and forget about them.
An alternative to the pay from smallest to largest balance idea, is the pay from highest APR to lowest APR approach. This works good too and, in fact, will cost you a little less in repayment if you can follow it. I like the smallest balance method because it is very motivating to see your bills go from 4 to 3 to 2 to 1 to finally being debt free.