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Step 1
Gather all your credit cards that have a balance owed. On a piece of paper write down all the cards, their balances, interest rate and the minimum monthly payment due.
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Step 2
Now take the cards with the lowest balances and check the interest rates. You will want to pay off the ones with the highest interest rate and lowest balances first.
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Step 3
Here comes the budget part; add up all the minimum payments plus $1.00 for each card that has a balance, except for the card you picked to pay off first. Now figure the maximum amount you can pay per month for this picked card and pay that amount. For the other cards pay the minimum balance plus $1.00 each. This will go slow at first, but do not get discouraged as it builds with time. Also, you will need to stop using your credit cards, so as not to increase your minimum balances or debt owed, until all the cards are paid in full.
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Step 4
After you pay off the first card, you can now apply that payment amount for the first card you paid off and add it to your monthly payment for the next card with the lowest balance and highest interest rate. This next card will pay off quicker than the first card, as you can apply more money to the payment. Keep doing this until all your cards are paid in full. If you stay with the plan, the last card will be paid off quickly as you can apply all the monies you were paying on the other card balances to this one.
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Step 5
Once all your debt is paid the challenge will be to stay away from the temptation to build the debt back up again. When reusing credit cards, do your best to stay within your income and pay off the balances each month. I know this sounds difficult, but it can be done.
Comments
Thims said
on 11/8/2008 Great advice that pays off! this article will surely earn you some credit!