Ten Easy Steps to Eliminate Credit Card Debt
1. Find out where you stand. It is important that you know exactly how much total debt you have before you can develop a plan to eliminate this debt. Do not forget to include any consumer debt lines you may have that in fact never issued you a physical map.
2. Go each of your cards / credit lines and put them in descending order of interest rate. The reason banks are so happy to issue credit cards is because they do such an incredibly high interest rates.
3. Now that you know what cards carry high interest rates, it's time to see if you can change the order. What many people do not know is that a simple phone call to the credit card issuer may immediately reduce interest rates. Call each of the issuers and ask for rate decrease. If they deny your request, ask the supervisor, and ask him again. You will be surprised how many times it will work.
4. Re-order your list, in the same order of magnitude.
5. Take note of any special rates or promotions that may be soon expire. If you have a card with 0% per annum, it will be at the bottom of the list right now, but if it changes a month, it could be high on the list fairly soon.
6. Make a second list - this is a list of total balance on each card. You want to do it in descending order, as well.
7. Another list. This will require a bit of mathematics. Take the total balance on each card, and divide it by total credit limit on the card. This will give you what is known as the "duty to the limit" as a percentage. This list will be descending, with the highest percentage at the top of the list.
8. At this point you have three lists. Each list will most likely be in a slightly different order. This step requires the decision to be taken. Is your primary objectives: 1) To eliminate debt quickly, 2) pay as little interest as possible, or 3) to improve your credit score?
9. If you want to quickly eliminate debt, you must pay the minimum balance on all the maps, but the top 1 in each of the first 2 lists (of course, without buying anything new). If you want to pay as little interest as possible, to pay as much as possible on the top card on the first list. If you want your credit to improve, you must pay a third list in the order we did.
10. Keep it! If you do not rack new debt, and continue to pay down your cards in order of the lists we have done, you will be surprised how quickly you can get credit card "monkeys" to flee back.
Finally, the loan is not bad thing, but you must be careful when you are looking for a new credit card. At the first comparison.
2. Go each of your cards / credit lines and put them in descending order of interest rate. The reason banks are so happy to issue credit cards is because they do such an incredibly high interest rates.
3. Now that you know what cards carry high interest rates, it's time to see if you can change the order. What many people do not know is that a simple phone call to the credit card issuer may immediately reduce interest rates. Call each of the issuers and ask for rate decrease. If they deny your request, ask the supervisor, and ask him again. You will be surprised how many times it will work.
4. Re-order your list, in the same order of magnitude.
5. Take note of any special rates or promotions that may be soon expire. If you have a card with 0% per annum, it will be at the bottom of the list right now, but if it changes a month, it could be high on the list fairly soon.
6. Make a second list - this is a list of total balance on each card. You want to do it in descending order, as well.
7. Another list. This will require a bit of mathematics. Take the total balance on each card, and divide it by total credit limit on the card. This will give you what is known as the "duty to the limit" as a percentage. This list will be descending, with the highest percentage at the top of the list.
8. At this point you have three lists. Each list will most likely be in a slightly different order. This step requires the decision to be taken. Is your primary objectives: 1) To eliminate debt quickly, 2) pay as little interest as possible, or 3) to improve your credit score?
9. If you want to quickly eliminate debt, you must pay the minimum balance on all the maps, but the top 1 in each of the first 2 lists (of course, without buying anything new). If you want to pay as little interest as possible, to pay as much as possible on the top card on the first list. If you want your credit to improve, you must pay a third list in the order we did.
10. Keep it! If you do not rack new debt, and continue to pay down your cards in order of the lists we have done, you will be surprised how quickly you can get credit card "monkeys" to flee back.
Finally, the loan is not bad thing, but you must be careful when you are looking for a new credit card. At the first comparison.
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