How much should I pay on my credit cards?
Credit Score
Does anyone know where to find an online calculator that will help determine how much you should pay on your credit cards in order to pay down your debt without throwing away too much money in interest. I’m looking for something that you can input your balance and interest rates that will show you how long it will take to pay off if you put X amount dollars on it monthly.
If you know of any website or program like this, please let me know! Thanks a bunch.
Tags: Balance, Cards, Credit, Interest Rates, Mortgages, online calculator
The answer: figure out what your predicted rate of return is on your investments. Right now, for me, I would say that I can’t exect to do better than 6%.
So any loans that are above that interest rate, should be paid off as soon as possible.
Priorities:
1) Make all minimum payments and bills on time
2) with what you have left, pay off as much as you possibly can on your highest interest cards/loans until all are paid off that have a higher interest rate than the rate of return on your investments
well the best way is to pay the money you owe as soon as you can becouse you will save alot on interst for example on a 15% APR and 1000$ card you pay 150$ a year but if you don’t have money see if you can transfer to another card with low rate some even offer 0% for some time, other than that
noneed for online thing that you were talking about
add the amont od interst paied in one preiod that apears on your statment look for it under limit and balance section! add that to your min payment that they want you to pay everytime anything like that pays of your dubt
There are two ways to do it. They both have the same first step, the second step is different.
1) Pay at least the minimum on everything.
2 a) Put any extra toward the credit card with the LOWEST outstanding balance. Pay that one off first. Then repeat.
2 b) Pay any extra money toward the one with the HIGHEST INTEREST RATE. This will cut your interest faster.
On each of your monthly statements, you will see the “minimum payment.” Any amount over this minimum required payment will go onto the principle of the loan. Most credit cards are set up to be a 15 year loan. The interest rate of this “loan” is also on your monthly statement. Different credit card statements put this information in a different spot, but if you read your statement thoroughly, you can find it.
If you pull out any basic calculator and multiply the interest rate by the amount of the loan and divide by 12 (12 months in a year), you will see that the minimum monthly payment is just barely over the interest for a month. Technically, the credit company does interest by the average daily balance, but dividing by the monthly balance will illustrate the point well enough.
So, for example:
If your balance on your credit card is $5000, and your interest rate is 10%, you will do $5000X .10= $500/12= $41.67. You may see that your “minimum payment” is $45. If you pay the min payment, you will only bring your balance down by the difference between $45-$41.67= $3.33. So, next month, your $5000.00 balance would be $4986.67.
If this is frustrating to you, it helps to see how you can bring your balance down. If you put any amount above the minimum payment, ALL of that extra amount goes toward the balance.
So, if you can “double” the minimum payment, that would be great.
But what if you have more than one credit card?
Well, again, look at the interest rates. If you are going to pay $10 toward each of them, that would be helpful. However, if you can pay all of those $10.00 extra toward the credit card with the highest rate, that will get you the biggest bang for your buck.
Rather than put $10.00 extra on 2 credit card, if you put $20.00 extra on the one credit card with the highest rate, you will pay less, over all on interest. When the highest rate card is paid off, then pay off the next highest rate card.
However, if you can only afford to pay the minimum payment, at least pay that. For every month that you are late with your minimum payment, your credit card can INCREASE your interest. The goal is to pay less in interest, not to have your rates increased.
Hope this helps!
Candella
You should pay off your credit card in full each month so you will pay ZERO interest. If you can’t pay it off in full each month then you shouldn’t be using your credit card and you shouldn’t be buying what you can’t afford.
If you can’t afford to pay it off in full, then pay as much as you can and work on paying off whatever has the highest interest rate first, while paying the minimum on the other accounts.
The best way is to pay off all your balance by end of each month. If you cannot afford to pay off all your balance, pay as much as you can on the credit card with higher interest rate.
I don’t know any website that help you calculate, but you can always calculate it on excel. (Using the PMT fomula)
For example, your original loan payment is $2,000. Interest rate is 22%, and you plan to pay them off in 4 years. Your monthly payment will be $63.01. You can pay off $2,000 in 4 years (48 months)…however, your total interest payment will be $1,024.58. *=PMT(22%/12, 12*4, -2000)
In other word, if you pay more than $63 in a month, you can pay off faster and compound less interest. If you only pay the minimum (less than $63 with a 22% interest, you won’t be able to pay off your $2,000 in 4 years!
You should transfer your balance to a zero percent apr card. Take a look at http://www.gozeropercent.com
There any many to pick from
Hi,
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