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If you are serious about paying off your credit card and have the extra money in your budget, I have found this simple solution very helpful and effective but you have to be serious about paying them off and stay on track.
I have 2 credit cards in my name only. I did this because I wanted my own credit score to go up and stay up. I have decided I wanted to pay them off in 18 months. I simply check the box that has your credit card payoff amounts in it. Usually there is one that says by paying the minimum, you can pay such and such amount every month. The next box gives you the option to pay it off in 3 years. I take the 3 year amount and divide it by 2 and then add the amount back into it and that is the amount I need to pay every month for 18 months.
To clarify: say I have the option of paying the minimum with $20.00 every month for 29 years. The 3 year payoff is $102.00. Divide the $102 in half and it gives you $51.00. Now add back on the 102.00 and you get $153.00. If you stick with this plan and don't use the credit card for the entire 18 months you are completely debt free.
Should an emergency arise and you have to use the credit card then try this: Say the amount you added to it was $40.00. Take the $153.00 and add the $40.00 back in and you have $193.00 that needs to be paid off from your emergency. This way you can stay on schedule and pay the complete debt off in 18 months. You have to be very sincere in your quest for being debt free in order for this to work. And in the end you will feel so much better knowing you do not owe anything to anyone and your credit score has just popped up some extra points.
Good luck to you.
By Gem from Gordonsville, VA
I made a vow when we first married at 18 and 19, to never pay interest on a credit card. I never have! When we were newly married my limit was 30.00 a month. If I had to buy anything after that I wrote a check. We have never made much money but every month whatever we have left is put in the bank. We recently changed from using banks to a credit union. They pay better interest than the bank does and less fees..
I've been reading "sticky-notes" ideas and was reminded of one of my own uses. I use the smallest notes (and I divide them in half). Then I stick them to my credit cards with a notation of the available balance remaining on that card - just dollars, rounded up, no cents, no dollar sign. I also have a notation of the interest rate - they all seem to have different rates!
Whenever I use a credit card, I remove the note to run the card. I then re-stick the note upside down to remind me to update the amount, approximating the most recent expenditure and rounding the dollar amount up. That is, if the purchase was, say, $13.29, I would subtract $15 from the existing available amount, then cross out the old number, and write in the new.
When I check into my account at that card's website, I can verify the balance. Meanwhile, I have a good idea of how much I can still use, if I need to, that is! I try not to use credit cards, but sometimes it is necessary. This way, though, I'm not caught unawares with the "card denied" embarrassment and frustration!
By AuntieBim from Tehachapi, CA
If your credit card debt is getting out of hand, the first thing you need to do is stop using your credit cards. Many people get into the mindset of "I'll pay it off later" or "I'm already in debt, what will a little debt hurt?". They keep using credit cards for everyday expenses so they don't feel broke and don't have to change their spending patterns. Retire your credit cards, set up a budget and start paying with cash.
I highly suggest Dave Ramsey's total money makeover plan. He advocates not using credit cards at all, paying cash for your cars and paying off your mortgages. You can use a debit card for things like travel. Debit cards are not credit cards. We all need to get back to basics and this is a great plan. You can find Dave's plan on the internet.
When paying off credit cards, always round up payments as much as you can. If the minimum payment is $25, try to pay $30. Credit card companies set minimum payments to maximize the amount of interest they can earn from you over the life of the debt.
To avoid late payment fees and possible interest rate increases on your credit cards, make sure to send in your payment 7-10 days before the payment due date. Late payments on one credit card can increase fees and interest rates on your other credit cards.
Ask a QuestionHere are the questions asked by community members. Read on to see the answers provided by the ThriftyFun community or ask a new question.
I'm new to this site and I've read the other posts on this subject but still can't find help. I'm 26, disabled and only receive a monthly income of 777.00. Before, (when I was stupid with money) I racked up a lot of charges and now I am in debt for about $4,000. I am having a lot of trouble paying even the minimum payment after bills, rent, food, etc. I don't have it.
The interest rates are at 27-29% on 2 credit cards. I get calls constantly but feel so bad that I don't answer anymore. I don't know what to do. I have tried to get state services for rent but still pay 400.00. I have no help from family or friends.
Is there a way that I can eliminate the interest charges altogether and only pay what I charged? I was told I had to have at least 9 months of minimum payments on time for them to even consider lowering the interest rate. The cards I do get approved for in the mail never have a low rate for balance transfers and I supposed the limit wouldn't be the amount I owe.
Thank you for your help and responses in advance,
Stacey from Texas
A credit counselor can get the rates lowered and also cut your bill in half. Search the internet, Care One, is a good one. They can definitely help you. Good luck!
I owe 20.000 in credit card debt. I was out of work for 2 years and paid My bills with cash advances. Just got back to work?
Here is the life saving organization. In a second they can take all your pain away.
i'm 30,000. in credit card debt. i'm 100% disabled do to diagnoised combat related ptsd & major depression by the veterans administration & social security disability.
what should i do? please help
I'm disabled and my husband is retired. We have very low income. Our credit card debt is about 100.000.00. We stopped paying creditors. So far they call all day and ask for money. How long they will be call? What happens after few months if they not received payment? What will be the next step what they can do to us? Our house, no market, is worth less what we own to the mortgage company. Please give answer. Thank You. DAN.
Can the credit card companies attach my assets - furniture, jewelery etc if I cannot pay my credit card?
When working on repaying my credit cards faster than minimum payments, am I better off paying $10.00 a week more or the same amount once a month? Thanks.
Penny from Michigan
The quicker you reduce the amount the better as the interest is charged on the amount left over at the end of the month or payment cycle - I would recommend being flexible depending on what other payments you need to make that month - have a set amount that you won't go below but like say $10 or $15 over and above the minimum but then if you can afford it put more in do so. If you just keep paying the minimum amount the debt never gets paid and any savings made at sales using the credit card is negated
Credit cards are "revolving" monthly. So I don't think that making a payment every week is going to help; however, if that's the only way that you're sure to make the extra payments, by all means go ahead and do it. But adding up your extra money every week and sending it in monthly with the bill would be the same. But then again, you might want to check with your credit card company. Because it seems that with some companies interest might be charged on a daily average and if you're paying week by week, your daily average would be smaller.
If you get offers in the mail, occasionally you can transfer your balance over to a 0% interest that can last for a whole year. Sometimes there is no transfer fee. If there is one, it is usually 3% of your balance. And depending on how much you owe, sometimes the transfer fee is cheaper than paying your current interest for a year. You must make sure that you are never, ever, ever late though with a payment for the 0% rate to stay in force.
I transferred a balance once and paid the transfer fee and made one payment. The next month was when we had our famous ice storm of 2007 and even though I had the money in our account to pay the statement when it came, with all the confusion of the ice storm, I totally forgot it. I was two days late and the company upped my rate to something like 15%. They refused to "forgive" the lateness.
Luckily the very next month I received another offer with 0% interest and no transfer fee (they do not come along very often), so I took advantage of it.
It is nice to know that 100% of my payment goes to pay off the principle of the balance for the time being.
It will depend on each card and how much extra you can swing a month ...
Let's say you have four cards and each have a balance due of $1,000.00 and each card is asking for a minimum payment of $50.00 per month ...
Card one charges 18 APR, the next, 20 APR, the next 22 APR and the last 24 APR ...
Based on those figures, what I did in the past was to add at least an 'extra' fifty to each card PLUS the added charged in interest for that month ... This way, I was 'getting ahead' as far as reducing the amount owed and the interest charges went down immensley in no time at all ...
Those bills were completely paid off in just a little over a year based on the debt amounts I mentioned above ...
No matter what, pay as much extra as you can above the requested minimum payment or else you'll be paying on those cards for years and years to come :-(
I now only use those cards in case of an emergency or convenience and pay them in full each month so not a penny of interest is charged :-)
Most credit cards charge interest on the remaining balance, each month. When I need to pay them off over time, I look for the interest & add as much as i can, usually, for me, it's $100 plus interest so whatever amount u add to the minimum is to the good.
A word of caution:
I often pay credit card bills before the due date and make extra payments when I get extra cash.
Recently, I paid a bill ONE DAY too EARLY for thier system. They didn't count it toward that month's minimum payment. Even though I had payed more than 100 dollars over the minimum payment, I got a late notice. When I called, they removed the late fee but advised me that I can not pay more than 10 days before the due date. Now, I think that's pretty rotten as they tell you to allow 7 days for processing. But, you've got to play their game. So, I make the minimum payment (at least) just before the due date and then make other payments as I have the money. I really can't wait to be rid of this bill!
I recently was trying to figure out who to pay what when and how much extra - I found bankrate.com - they have a section paying of credit cards that you enter how many bills you want to pay off, how much the interest rate is the minimum payment and how much extra you can afford a month. Then it calculates for you where to send the extra and when telling you how long it will be before you are debt free. It is nice to know that there is light at the end of the tunnel. We have 23 months and we should be free.