Reasonable debt payment?

Question

I have a little under $9,000 in credit card debt left and I had made a payment plan for myself that every paycheck I would put money towards it. During the summer, there was a lot of activities going on so I couldn't pay as much as I wanted to. I started off with $13,000 in debt in March '07. Am I really making progress? Should I be worried that I've been paying $200 less a paycheck than I wanted to these last couple months?

Answer 1

You are doing fine.

Here is the only suggestion I could make.

Rate your credit cards using the annual interest rate. Write down how much you paid to each card last month, and the minimum monthly payments on all.

Subtract the minimum payments from your total payments, this gives you the amount of money you have extra to devote to getting rid of the debt. (as you have to make your minimums no matter what).

Now, take the highest interest rate card and send the ENTIRE extra amount to that card and only make the minimums on the rest of them.

In this way, you will pay off the card that is costing you the most in interest first. Then you can take the entire payment from the paid off card (minimum + extra) and add it to the minimum payment on your next highest interest rate card. Keep doing this until all cards are paid off.

Most people split the "extra" money between all their cards and although this is better than only paying the minimums, results in more of your hard earned cash being spent on interest. Screw the credit card companies at their own game and realize the true cost of credit.

And, just to let you know, this is the way I am paying off $25,000 in personal cc debt and $70,000 in my business's debt. In just 6 months I have already reduced the cost of the interest by over 30% a month. In just 6 more months, the highest cards will be at zero balance (and ripped up) and the next cards will only take a fraction of the time to pay off.

good luck to you

Answer 2

Activities as in other things you wanted to do , instead of paying your bills , you can make the minimum payments , it is just the longer you drag it out the more they make , credit is not buying power , it is a loan that makes a company money , anytime you are borrowing money , you are not doing good , many are mis-led by this , credit is the amount they are willing to let you owe them for a fee , no one ever saves money with a credit card , and no you do not save anything with rewards/points either ,you save by dealing in cash if you had saved every penny you spent on your wants , and got to have it nows you would have more than the credit companies offer you , say you find a car for 9 grand instead of using credit and paying more than 9 grand . offer them 6 or 7 cash money , and you get the car , you save 2 or 3 grand with cash , ..with credit you pay 9 grand for the car plus the interest , say 11 grand , but you earn 1000 points to get a 10 dollar gift card , where in the h*ll did you save ? pay off that card and leave them fkrs alone , finacial growth is not based on how much you can borrow because it is not your money , You have borrowing power which means nothing , you need buying power.(cash)

Answer 3

If you are not already doing so, concentrate on the highest interest rate card, while making minimum payments on the rest. When the highest is paid off, move to the next.

This saves interest and makes pay off faster.

Keep up the good work. You'll be out of debt in no time.

Answer 4

If you have reduced your debt by $4000 in 6 months, you are doing very well. that means you are on average redcuing your debt by $666 a month. As you keep paying off debt, more of your payment will go to debt and lkess to interest. At this rate you should be out of debt in less than a year.

Answer 5

Missing payment is pretty much a normal thing, it happens all the time! Of course you should always try and make it during the normal time, but for the most part you will get the occasional extention.The thing is you don’t have to be worried at all as long as you can still pay it within the time duration. but don't make it a habit or you may attract additional surcharges or even a poor credit rating. For more tips and ideas of proper financial handling, visit our website at www.bankruptcy-advice.com.au/darwin.

Answer 6

Hi,

Yes, you don't do any wrong. But you can go for a debt consolidation or balance transfer to make it much simpler. Check out http://financeguru.consumerspot.info for some useful info and tips. Good luck!

Answer 7

i think its a good accomplishment any money paid down is good! no dont be worried just worry if you miss a payment =)