If I have $5,000 on two credit cards each and I'm being charged $50 finance charge monthly because of the outstanding balance, what is the best way to go about and pay them off quickly? Or consalidate them???
2006-11-08 12:01:08 · 9 answers · asked by pololous 1 in Business & Finance ➔ Credit
The first step is to stop using the cards! I keep my credit cards at home in a safe place so that I do not get tempted to use them while I am out and about. Once you have done that, the next step it to look at your budget. You can easliy make a spreedsheet in excel to keep track of what you pay each month. When you know how much you HAVE to spend (like rent, food, gas, etc) then the money left over goes to things such as credit card bills and extra spending money. What works for me is to start paying off the smaller bill first...I like to see that I have completed something. That way, you also have more money to pay on the larger bills. Only in extreme cases: try to tranfer the larger balances to another card that has a smaller interest rate. If you do that, CANCEL the cards that you just zeroed out. That way, you will be paying less....but you should CANCEL the zero balance card. It would be good to just have one credit card for emergencies.
2006-11-08 12:16:13 · answer #1 · answered by Pixie 2 · 0⤊ 0⤋
Consolidation is probably a good idea, so you are paying $50 on one card, instead of $50 on two. Some credit companies offer debt consolidation, but be careful about the underlying interest charges or long-term interest charges - they can appear good on their face, but be worse in the long run. You may even be able to call the companies about lowering your monthly minimum payment (to avoid the finance charges) or about paying partially (if you have $10,000 in debt, but can offer them hypothetically $7500 quick as full settlement, some credit card companies will take it)
Do NOT cancel the cards though, once you zero them out. This is a horrible idea as you will destroy your debt to credit ratio (the amount of debt you have compared to the amount of money you can borrow).
I would recommend going to free websites to start, such as www.fool.com, www.suzeorman.com and www.smartmoney.com. All three have excellent debt management sections with recommendations and professional advice. If you need further help, you can consider going to your bank as many now offer financial services or going to a debt management company for help. They will help you negotiate down some of the debt.
2006-11-08 12:52:42 · answer #2 · answered by jerry 5 · 0⤊ 0⤋
stop usin g them, and pay as much as possible each month. If you can get a low interest loan to pay off your credit cards, that is better, because the interest will be less than the cards charge. Either way, always pay off more than the minimum payment.
2006-11-08 12:09:48 · answer #3 · answered by judy_r8 6 · 0⤊ 0⤋
you should really pay off debt. That 10k contained in the monetary employer isn't earning you very a lot funds and also you're dropping extra on interest from the debt. pay off the charge playing cards first, then the motorcar mortgage. That leaves you $2,000. you may pick to proceed to make funds on your scholar loans and characteristic a cushion of $2,000 contained in the monetary employer, or you may take that $2,000 and placed it in route of your scholar loans. really pay off the debt. you're $10,000 contained in the monetary employer isn't creating wealth for you.
2016-11-28 22:42:09 · answer #4 · answered by ? 4 · 0⤊ 0⤋
Switch to no interest for 6 months cards,transfer the balances,give up unnecessary expenditures, and pay as much as you can afford above the minimum payment! :-)=
2006-11-08 12:10:25 · answer #5 · answered by Jcontrols 6 · 0⤊ 0⤋
well if your a home owner refinance your home and cashout or get a Helloc with no closing cost... you can also go to credit couseling and they can consolidate your loans into one loan at a lower rate... but if your looking to purchase a home or looking for a refinance that credit counseling can damage your credibility with mortgage banks..
2006-11-08 12:08:19 · answer #6 · answered by MortgageGURU 1 · 0⤊ 0⤋
You could always consult with a credit consolidator, who pays off your bills for you and then you pay back only them...
2006-11-08 12:09:20 · answer #7 · answered by ? 2 · 0⤊ 0⤋
Get a loan from your bank, and pay it pff, the bank loan has lower interest rates.
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http://www.bestcreditrates.net
2006-11-08 14:29:53 · answer #8 · answered by Anonymous · 0⤊ 0⤋
cut them in half,change your name pay cash for everything and move
2006-11-08 12:03:42 · answer #9 · answered by piper182 1 · 0⤊ 1⤋