There has been an explosion in the number of credit cards for only one reason: the credit card companies make a ton of money charging high interest! They also know that people spend aboutone-third more when they use credit cards rather than cash. The average household with an unpaid balance has about $10,000 in credit card debt.
Here are some suggestions to help you pay off your plastic.
Snowball the Plastic!
Snowball your way out of debt! In addition to making the minimum payments on all your credit cards, focus on paying off the smallest balance card first. You’ll be encouraged to see its balance go down and finally to be completely paid.
Then, after the first credit card is paid off, apply its payment toward the next smallest one. After the second card is paid off, apply what you were paying on the first and second toward the third smallest. That’s the snowball in action!
So…where do you start? List your debts in order with the smallest remaining balance first. Every time you pay off one don’t forget to celebrate!
Perform Plastic Surgery!We started with nine credit cards, and today we carry two that we pay in full each month. Fewer credit cards makes life simplier! So, cut up the cards you do not really need. If you can keep the cards you’ve had the longest it will help your credit score.
Also, opt out of receiving telemarketing calls and credit card offers by mail.
Log on the Web site of the National Do Not Call Registry at www.ftc.gov/donotcall to stop telemarketers. To stop junk mail, call toll free 1-(888)-5OPT-OUT. You’ll be really glad you did.
Lower the Interest Rate!
There is a lot of competition among credit card companies for your business. If your company is charging a high interest rate, phone and ask them to drop it. You may have to call several times, but 75 percent of the time, they will lower the rate.
Another alternative is to transfer the balance to a card that charges less interest. Before switching to a lower-rate card, confirm that the new card has no transfer fee, no annual fee, and that the interest rate on transferred balances is not higher than the advertised rate. But remember, if you miss a payment or make a payment late, your interest rate will automatically skyrocket in most cases.
Copyright (c) 2011 by Compass-finances God’s way TM. All rights reserved.
Christian author Gary Thomas writes that God designed marriage to provide a partnership, spiritual intimacy, and the ability to pursue God together. But cold, hard facts show that its even more than that. On a financial plain, marriage has several characteristics more related to a business than a romantic institution. Today on MoneyWise Rob West and Steve Moore explain how that’s the case. Next, they answer your questions at (800) 525-7000 and firstname.lastname@example.org about the following:
-I’ve come to the conclusion that I need an online savings account. Does “member FDIC” mean the same thing as being federally insured?
-My son is 24 and has a couple of credit cards that he pays off monthly. Is that enough for him to be building credit?
-We are in the process of moving and we haven’t chosen a new church yet. Should we save all of our tithe and give it to the church we decide to stay with?
-What’s the difference between a money market and mutual fund?
-I’m on a limited income. I’ve been working on my credit card debt, but I can’t seem to get them paid off. Should I look into a debt settlement company?
-I’m going to retire in three years. My employer has a supplemental deferred compensation plan. Would it be wise for me to participate in the age 50 catch-up contribution?
Be sure to check out our new website at moneywise.org to connect with a MoneyWise Coach or access our books, videos, or any of our free helpful resources. You can also find us on Facebook. Thanks for your prayerful and financial support that helps keep MoneyWise on the air. And if you'd like to help, just go to the website and click the Donate tab at the top of the page.All Sermons by Rob West & Steve Moore