3 credit card debt payment strategies that can be the solutions to paying them off, and improve your credit score.
The 1st strategy is referred to as snowballing.
Direct the most money you can to the card with the lowest balance.
Continue to make minimum payments to any other cards with balances.
When the lowest balance is paid off, make the minimum payment plus what you were paying to the next card in line, and so on.
If you're under a mountain of credit card debt, it's certainly stressful and may seem insurmountable.
The 1st strategy helps you start from the bottom and get to the top.
Psychologically, it can be very motivating to see real solutions from paying off the smaller balances first.
The next strategy involves tackling the card with the highest interest rate.
This can help pay the balances off faster, but may require a bit more discipline.
Paying the most expensive credit card debt first, allows you to save money on interest charges.
These savings are then applied to the next card to help pay off the balance faster.
The focus of the 2nd strategy is increasing cash flow by interest savings.
In this manner, the money saved is used to accelerate payment of other card balances.
The 3rd strategy provides 2 solutions in one; pay off card debt and benefit credit scores.
For example, if you have a card with a $10,000 limit and owe $9000, 90% of the limit is being used and only 10% available.
It's close to being maxed out and can negatively impact your credit score.
The focus of this strategy is to pay off the cards that are closest to being maxed out first, which also increases the percentage of available credit.
Total available credit percentage is a key ratio that the top credit reporting agencies use to calculate scores.
Increasing the percentage of available credit you have, will improve your credit score.
Higher credit scores have the added benefit of lower interest rates charged, thus saving you money! One last piece of advice; please steer clear of the majority of debt consolidation companies.
There are reputable ones out there, but watch out for the red flags.
There are 2 major red flags to look out for when dealing with a debt consolidation company.
The 1st red flag is the company asking for a "fee" or money up front.
The 2nd is telling you to stop paying your debts, and they will handle it.
What these companies will handle is the fee that you paid, while your credit score goes down the toilet.
It may seem like desperate times, but these people are only after what money you may have left! A very good non-profit credit counseling and education organization I recommend is CredAbility.
There's a link if you click on the name.
Getting out from under a mountain of debt from credit cards is a slow and disciplined process.
I hope these credit card debt strategies are practical solutions for helping you pay them off, and provide relief from the added monetary stress.
The 1st strategy is referred to as snowballing.
Direct the most money you can to the card with the lowest balance.
Continue to make minimum payments to any other cards with balances.
When the lowest balance is paid off, make the minimum payment plus what you were paying to the next card in line, and so on.
If you're under a mountain of credit card debt, it's certainly stressful and may seem insurmountable.
The 1st strategy helps you start from the bottom and get to the top.
Psychologically, it can be very motivating to see real solutions from paying off the smaller balances first.
The next strategy involves tackling the card with the highest interest rate.
This can help pay the balances off faster, but may require a bit more discipline.
Paying the most expensive credit card debt first, allows you to save money on interest charges.
These savings are then applied to the next card to help pay off the balance faster.
The focus of the 2nd strategy is increasing cash flow by interest savings.
In this manner, the money saved is used to accelerate payment of other card balances.
The 3rd strategy provides 2 solutions in one; pay off card debt and benefit credit scores.
For example, if you have a card with a $10,000 limit and owe $9000, 90% of the limit is being used and only 10% available.
It's close to being maxed out and can negatively impact your credit score.
The focus of this strategy is to pay off the cards that are closest to being maxed out first, which also increases the percentage of available credit.
Total available credit percentage is a key ratio that the top credit reporting agencies use to calculate scores.
Increasing the percentage of available credit you have, will improve your credit score.
Higher credit scores have the added benefit of lower interest rates charged, thus saving you money! One last piece of advice; please steer clear of the majority of debt consolidation companies.
There are reputable ones out there, but watch out for the red flags.
There are 2 major red flags to look out for when dealing with a debt consolidation company.
The 1st red flag is the company asking for a "fee" or money up front.
The 2nd is telling you to stop paying your debts, and they will handle it.
What these companies will handle is the fee that you paid, while your credit score goes down the toilet.
It may seem like desperate times, but these people are only after what money you may have left! A very good non-profit credit counseling and education organization I recommend is CredAbility.
There's a link if you click on the name.
Getting out from under a mountain of debt from credit cards is a slow and disciplined process.
I hope these credit card debt strategies are practical solutions for helping you pay them off, and provide relief from the added monetary stress.
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