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So you have some debt. Boo Hoo join the club just about every American has debt of some kind.
I am only going to cover one part of the debt equation and that is your UNSECURED DEBT! Namely CREDIT CARDS and CREDIT LINES!
First thing is first: You need to find out your situation and your credit score.
Why is my credit score and report so important? INTEREST!!!! I cannot stress enough how much things cost when you tack on interest payments.
A little about credit scores and why they affect you so much. Your score needs to be at least at a certain level to obtain credit. If you are reading this you probably have a credit card or two or three.
I have added an entire section on credit scores check it out here.
DEBT REDUCTION METHODS
Snow Ball Method
Step one is to write down your debts in order from smallest to largest with the total debt and the minimum payment on each. This method is simple pay the minimum on all debt except for the first one on your list where you put everything you can spare extra into paying it off. Once you are done with the top one go on the next one on the list and so on. This method is designed to not get you involved with interest payments as they usually will just make you sick to your stomach. As you pay off each debt, you will find yourself with more and more to put towards the next one on the list.
Use the calculators below to see how long it would take to pay off debt with just the minimums and you can also see how the extra cash towards the top debt will pay it off sooner.
Interest Rate Killer
In this method you do the same as above method, write down all your debts with minimum payment and interest rate. Instead of paying off the smallest one first you pay minimums on all cards except the highest interest rate card and work your way down from highest to lowest interest rate.
This works extremely well, especially if you have the ability to transfer balances to take advantage of promotional interest rates while working off the high interest rate cards.
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