What is the best way to pay down credit cards?

Question

I have more credit card debt than I am comfortable with. The warning bells are going off in my head. I've built it up slowly over time with the small stuff and the occasional big item or purchase (like a TV and some emergency home repairs)

I owe about $16,000 to 7 different companies, some larger balances, some small.

I am able to make the payments, but I just don't like the amount I've reached. If I allocate a certain amount each month to credit card payments, should I try to pay off the smaller balances and get rid of them or just spread it around evenly? My score is excellent so I wouldn't consider a "counseling" program.

Answer 1

I have developed credit card debt too with being on maternity leave and being single (I cant' live on 60% of what I was making and maternity is only 60%!! ok, lol.. enought jusifing). I am very good with money and know that I will pay it off. For the min. payment, I just use one credit card to pay off the min. payment on another. I do that every month... But soon I will be able to actually PAY it off as I will be done maternity:)): So my adivse is to pay off the min. payments with other cards (that will nickle and dime you if pay those out of your pocket!). Than just pay off one card at a time./

Answer 2

Step 1: WRITE a budget. Until you are spending LESS than you EARN, NO plan will reduce your debt.
Step 2: Pay the MINIMUM on all but on debt.
Step 3: Pay as much as you can on the one debt.
Step 4: Once the first debt is paid, add the payments from that debt the the next on the list.

Depending on who you ask, you should either pay off the smallest balance first or the highest interest rate first. Whichever order you pick, concentrate on ONE debt at a time.

Answer 3

Pay off smallest debt cards first to alleviate you of that interest...then attack the larger balances with making more than the monthly required amount...if you can't handle double or triple payments...even $5 or $10 extra makes a difference as every dollar extra is going on the principal and not being eaten up with interest. Once you get these cards paid off...keep ONE major credit card, and use it sparingly...don't charge an item until the first item is paid off. This system works! I was in worse financial strain than you...now I'm debt free except for a mortgage, and have a great credit rating

Answer 4

First, stop using them. Start using cash whenever possible. That way, you'll at least slow down the amount of interest you're paying. The extra interest you pay will slow down how long it takes to pay them off. So use cash as much as possible and credit cards as little as possible.

If you get any offers in the mail for a credit card with 0% interest on balance transfers until November of 2008 (or later), apply for the credit card and transfer as much as you can from the cards you have that are charging the highest interest rates. Then, when you get that card, stick it in a drawer somewhere and never use it. Making the minimum payments on that card as long as the 0% rate lasts or until you have it paid off (whichever comes first).

After you do that, pay off the card with the lowest balance on it as fast as possible. Making the minimum payments on the other cards if you must in order to do this. Once that card is paid off, you should get some kind of offer from that card to transfer your balances with a lower rate. Once you get that offer, transfer as much of the balances as you can from your cards that charge the highest amount of interest.

Next, make the minimum payments on the cards with the lowest interest rates, and pay as much as you can on the cards that charge the highest interest rate.

Ideally, you want to get into a situation where you have your entire debt on a card with no interest. If you must use a credit card for anything, use a credit card that has no balance on it, and pay that balance off at each billing cycle. Make the minimum payments you can on the card with 0% while still being able to pay off the credit card with new purchases on it.

As you get cards paid off, cancel them. You should only need one or two credit cards.

Answer 5

some say go for the higher interest rate cards first this way your saving more in interest payments over the long run but that's them when your ready to get serious about being debt free pay the minimum amount to all but one, the lowest balance first. this way you will have a nice feeling of accomplishment then take that payment and apply it to the next lower one now your making progress keep it up and soon your dept free.

Answer 6

First, put the cards away and stop charging. Second, make sure you keep up at least minimum payments on all accounts. Third, pay off the highest interest rates first. If you can transfer some balances onto existing cards with a lower rate, do so.

Answer 7

call the credit card companies and ask for a lower interest rate because you are attempting to pay it way down, usually you can get at least a few points off. then pay as much as you can on the card with the highest balance, when that is paid down then do the same on the next card with the highest balance and so forth.

Answer 8

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Answer 9

Definitely pay off the small stuff if you can do it quickly.
You should look at your interest rates. If you have a large bill with high interest, try to transfer it to a credit card with a lower interest rate.

Answer 10

You fell for their game. You can't spend more than you make o.k. it's really that simple. Pay only with cash for a week so you can really see how fast you spend it. That should show you that money in cyberspace is not on a card its on you working hard.