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
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
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
I have been in this situation, and it is very stressful! First and foremost you must remember that when a credit card collector threatens you, 95% of the time it is bluff. I have been round and round with these folks and there only goal when they call is to get a payment from you, and they will do whatever they can to do it.
Sometimes they break the law to do it, so you must know your rights and what the Fair Debt Collection Practices Act states that collectors can and cannot do. Google it and educate yourself! Like I said I have been in this situation and have learned how to handles these people. They are not your friend, they are a person sitting in a cubicle somewhere, and have probably been on the job for a month or so.
Insist that you must pay your basics like shelter, food, transportation first. Then you tell them you can only pay what you can pay. They will take less than the minimum, but you must be persistent! Also you may be able to get them to charge off your account. That will close the account and stop interest. It will be a hit on your credit, but nothing you can't recover from. Get the debt cleaned up and build up a cash reserve for emergencies!
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
If you have multiple cards, you can do what is called a snowball. You pay the minimums on all cards but one, and pay as MUCH as you can toward that one card until that card is paid off. Then you take the payment you were making on that card, and add it to the next one.
The order in which you snowball depends on whether you want to get out of debt the fastest, or pay the least in finance charges. Some people attack the lowest balance first, since that will result a nice psychological boost. Others pay the debt with the highest APR first, cuz its the most expensive. You would have to work it out mathematically to see how these options break out.
---Credit cards are "revolving" monthly---
Many credit cards compound DAILY, and some use 2-cycle billing to maximize how much they charge you. Some cards also start charging interest from the moment you make a purchase, not just based on the statement balance.
I agree that there is not going to be a large difference between making extra payments each week.
---If you have internet banking so you don't pay postage---
I recommend making the payment through the card issuers website, not your banks.
You could try playing the 0%/balance transfer game, but if you haven't solved the problem which got you into debt in the first place, you may just be tempted to run the cards back up again. Pay a lot of attention to the terms and fees also.