Brandi RhoadesTaking Control of Credit Card Debt
August 30th 2008 17:14
Americans and their credit cards are in a tenuous relationship right now. While many surveys show Americans claiming they pay their debt off monthly, statistics from the credit card companies don’t support this claim. The fact is that many households carry credit card debt over from month to month, and most of these houses are middle-class.
Getting control of your cards is tough. You may not know where to begin, and you may find yourself scared of the prospects.
So let’s get started. To tackle the problem, you have to face the beast. Sit down with a glass of wine – or two – and begin getting a handle on your debt.
1. Find a sheet of paper and a pen.
2. Write down the names of the credit cards you know you have. Then go to your wallet and make sure you included all of the names.
3. If you keep your statements, find the most recent ones for each card. If not, get the phone and use the numbers on the back to begin calling.
4. For each card, record the balance, the interest rate, and the minimum monthly payment.
5. Go to a payment calculator online. CNN and Bankrate.com both have good repayment calculators and planning tools. Plug in your information to determine how long it will take to pay off the cards paying only the minimum each month.
6. Determine the amount extra you have to put toward the card each month. (At this point, you may not know. Choose an amount you know you can pay extra even if it’s only $25 a month.)
7. Take the card with the smallest balance and plug the numbers back in, adding the additional monthly payment to this card. See what the difference is. For example’s sake, let’s say your smallest balance is $3,000 with a 10% interest rate and a minimum payment of $55 a month. Paying the minimum would take 14 years, 5 months. Adding an extra $25 a month would take only 3 years, 9 months.
8. Commit yourself to adding the minimum you selected. Once you get a handle on your budget, you can begin to tackle more debts and put your financial life back in order.
Getting control of your cards is tough. You may not know where to begin, and you may find yourself scared of the prospects.
So let’s get started. To tackle the problem, you have to face the beast. Sit down with a glass of wine – or two – and begin getting a handle on your debt.
1. Find a sheet of paper and a pen.
2. Write down the names of the credit cards you know you have. Then go to your wallet and make sure you included all of the names.
3. If you keep your statements, find the most recent ones for each card. If not, get the phone and use the numbers on the back to begin calling.
4. For each card, record the balance, the interest rate, and the minimum monthly payment.
5. Go to a payment calculator online. CNN and Bankrate.com both have good repayment calculators and planning tools. Plug in your information to determine how long it will take to pay off the cards paying only the minimum each month.
6. Determine the amount extra you have to put toward the card each month. (At this point, you may not know. Choose an amount you know you can pay extra even if it’s only $25 a month.)
7. Take the card with the smallest balance and plug the numbers back in, adding the additional monthly payment to this card. See what the difference is. For example’s sake, let’s say your smallest balance is $3,000 with a 10% interest rate and a minimum payment of $55 a month. Paying the minimum would take 14 years, 5 months. Adding an extra $25 a month would take only 3 years, 9 months.
8. Commit yourself to adding the minimum you selected. Once you get a handle on your budget, you can begin to tackle more debts and put your financial life back in order.
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