Pay Off your Debt

by : Evelyn Saunders

So you've gotten yourself into a credit card bind. If you are only paying the minimum amounts due on each card, then there may not be an end in sight for years. You have to realize that you are at the credit card company's mercy and decide to get yourself out. You have to want to get your own life back and make conscious, deliberate moves to make a move in a positive direction. If you're not sure where to start, take some of these popular strategies into consideration when devising your pay-off plan.
Probably the best way to get out of debt is to attack high interest rate cards first. To do this, you need to actually write down your income, subtract your minimums and other monthly bills. When you see what is left, take out what you need each week for food and gas. Any extra income needs to be applied to the highest rate of interest card that you own. Just increasing the amount you pay to above the minimum can knock years of payments off of your payment plan.
Consider the extra money a payment to yourself. If you don't pay it to yourself, then you'll be paying it to your credit card company for years to come. Consider a couple of years of prudence over many years of padding the credit card company's pockets. Your goal should be to at least double your minimum payment. Keep paying the same amount month after month despite the credit card company's plans to entice you back into their clutches. You'll see smaller and smaller minimums due. You'll get more offers in the mail. Your credit line might get increased. Ignore these tactics and stick to your plan of getting free.
Some people find it motivating to pay off their smaller balances first. This could be a good idea if it keeps you on track. Also, if you have more than four credit card accounts, that alone can hurt your credit. These are things to consider. If you have 5 small store accounts on top of your major balance cards, then paying them off and closing them can look better on your credit report. This could give you more leverage when negotiating with your higher interest card companies to lower your interest rate. Once you get down to three or four credit cards, it's a good idea to switch to the first plan of paying off the highest interest card first.
When you're going through the process of paying down your debt, make sure that every time you pay off a card, you apply that amount that you were paying to the next card. It helps to pay your bills online, preferably through your bank. That way, you can always see what your last payment was and pay the same again regardless of what the bill says you owe. Round up the amount that you're paying to a good whole number to make yourself pay a little more than you might have originally paid.

Any time that you receive a tax return, bonus, raise, money from a garage sale, any extra income, it should always go directly to the card that you're cracking down on. Go online immediately and send that money to the credit card company. Don't try to save it in your bank account until the next bill is due or you may end up whittling it away and missing your opportunity to knock months off of you bill. If you're a student, you may qualify for student loans or private student loans for future emergencies which can have better terms than a credit card.