Helpful Credit Card Strategies
Now that the budget has been established, it is time to work on creating a pay down plan for your credit cards. A pay down plan is creating a feasible way of lowering the credit card balances down to zero.
As we mentioned earlier, one way of doing this is to pay on each card, but pay a little more on the smallest balances to get them cleared away first. Once that card is paid off, take the amount that was being paid on that card and apply that same amount each month to the next lowest credit card balance.
That will double or even triple the amount that was being paid on that credit card and it will take less time to pay that card off. Continue this process until all the cards are paid off. In the end, the last card might be paid off in just a couple more payments and then it is all over.
Another way of looking at the pay down plan is to look at the interest rates on each card. Sort the credit cards with the highest interest rate first. All the minimum payments get paid on each card, but all the extra money saved from cutting your extra expenses goes towards paying extra on the card with the highest interest rate. Continue in the same fashion as mentioned earlier until all the cards are paid off.
Yet, another way to help the balance on the credit cards to go down is to call the credit card companies to see if they can lower your interest rates. This needs to be done now before you get behind with any payments. It will not look very good if you miss payments and then call them about lowering the interest rates. Take this step before you get in over your head.
If the credit card companies are unable to completely lower the interest rates, speak with them companies about consolidating two or more credit cards onto one. It may be possible to transfer balances from a higher interest card to a lower interest card. That can save a person hundreds, possibly thousands of dollars a year on interest alone while paying down the debt.
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