DEBT MANAGEMENT
Credit Debt Elimination Tips
How can you get rid of your credit card debt? Here are a few helpful tips!
Prioritize Repayments
Credit card companies require a minimum payment each month. The next step in reducing credit debt is to be sure you can make the minimum payments on your credit cards. Look at your spending and see if you need to make cuts to find the money
to pay your credit card bills.
Plan to do more than just pay the minimum
In the example above, if you paid $60 each month instead of $50, it would take you 8 years and 4 months to pay off your $3,000 and cost you $2,947 in interest charges.
Choose strategies to cut your debts as soon as possible
Pay high-rate cards first. At higher interest rates, more of your monthly payments go toward finance charges. Quickly paying off balances on your credit cards with high rates can free up cash to pay other bills.
Pay off cards with the smallest balances first. Paying off cards with small balances gives you extra money to pay on the bigger balances.
Stop making new charges
If you have to, have a "plastic surgery party" and cut up all your cards, hide them, or lock them in a drawer.
Stay flexible
The key to sticking to your debt repayment plan is to stay flexible. If you find that you set unrealistic spending limits in the beginning, revise your spending plan the next month.
Barbara R. Rowe, Ph.D., Professor and Family Resource Management Extension Specialist, Utah State University
Useful Software
PowerPay is a useful tool for organizing credit debt and cash flows. All you have to do is register with the site and it’s free of charge! The following is a list of what PowerPay offers:
