Better Credit Living

Being in dept is a key burden to many house holds and credit card dept is the worst of them all. This is because most credit cards are characterized with high interest rates thereby it becomes very hard for most people to pay their depts. Even when only making the minimum payment. Minimum payment is not the best way to clear your debt arrears as this in the long run will cost you more and takes you longer to clear the credit card payment. Fortunately, there is a way out to everything and ill show you how you can make credit card depth a thing of the past in your financial life. The following will also equip you with how you can improve your credit card score record thereby opening up for you more financial opportunities in the future.

The first step is to make a list of all of your credit cards. With the list, provide details of your outstanding balance, interests rates on each card, and minimum payments required for each card as well. All these details will be available in your credit card monthly statement provided by your bank.

With the above details available, order your list in descending order, having the credit card with the highest interest rate at the top and that with the lowest interest rate at the bottom. With this order, you will then be able to sum up the total minimum payment required by all the cards.

Having summed the total minimum, you are able to estimate the absolute monthly payment. Having in mind that we need to clear the depth fast, you will need to pay more that the minimum amount. This will force you to review your budget thereby channeling all the extra income on monthly basis in to clearing the credit card debt. Whatever minimum amount you can get will help cut down the interest being accrued by your credit cards.

When due for payments, make minimum payments on all your cards except the one at the top. The extra income that you raise from your budget should be added to the minimum of this card and then make payment slightly above the minimum. This is due to the fact that this card attracts the highest interest and is costing you more money to maintain a balance.
This process is to be continued until you clear the first cards payment. Employ the same idea over and over until you settle all your credit card dept. Note that these steps will not make you debt free overnight but will help you get out of dept as soon as possible.

Also note that with this system, your monthly payment will remain constant regardless of your balance. Before you notice it, your monthly minimum will be falling but ignoring that and continued payment, your principle will add up thus accelerating your payment. This will simply ensure that you have proper payment records and provide you room for negotiating lower interest rates next time with your bank.

This entry is filed under Bureau, Consolidation.