==== ==== This article talks about how to eliminate credit card debt. http://www.whatisdebtelimination.com/how-can-i-eliminate-credit-card-debt/ ==== ====
Do you ever feel anxious when you collect your mail in the evening? Does your stomach flip over when you realise your credit card statement has arrived - and you're too scared to look at the balance? You're not alone, according to the 2009 Consumer Financial Literacy Survey, which revealed that only 42% of American adults keep track of their spending habits. That's plenty of nasty surprises arriving in the mail each week. If you feel like you're drowning in this debt, it's time to take action. To eliminate it as quickly as possible, you need to create an action plan. Action Plan Step 1: Face the facts. As difficult as it might seem to see the numbers in black and white, you need to know your overall financial position. To do this, you need to create a list of ALL of your credit cards, including the credit limit, balance owing, the interest rate, and the minimum monthly payment. Add it all up and see how much you owe overall. Action Plan Step 2: Prioritize. Arrange the list so that the credit card with the highest interest rate is at the top, and the credit card with the lowest interest rate is at the bottom. For example, you might have three credit cards, listed as follows: 1. Visa. Limit - £2,000. Balance - £1,800. Interest: 22%. Min payment: £90 2. Amex. Limit - £5,000. Balance - £4,760. Interest: 19%. Min payment: £225 3. MC. Limit - £1,500. Balance - £1,500. Interest: 17%. Min payment: £70 Your total debt is £8,060, and your minimum monthly payment across all three cards is £385. Action Plan Step 3: Divide and conquer. If you haven't already, write up a budget so you can see how much money you have to spend each month. You need at least £385 to cover your minimum credit card repayments, but in order to eliminate your debt, you need to pay more than the minimum due. Work out how much
extra you can afford to pay off your card debt. Let's say, for example, you can afford £450 per month, which is an extra £65. Each month, pay the minimum balance on each credit card, except the credit card with the highest interest rate - in this case, the Visa card. On the credit card, pay the minimum payment of £90 plus the additional £65 - so that's £155 per month. Action Plan Step 4: Stay the course. Within a few months, you'll see that Visa balance begin to shrink. If you continue this payment plan - and, most importantly, you don't rack up any new charges on your card - you should have this balance paid in full within around 12 months. At the same time, you've been slowly chipping away at your other credit card balances, so your overall credit card debt should be considerably lighter. The most important factor affecting the success of this system is your credit card spending. If you continue to rack up charges on your credit card while you're paying them off, you won't get anywhere - you have to be committed to eliminating your debt to achieve success! If it helps, call your bank and ask them to lower the limit when you make a payment each month, so you won't be tempted to purchase anything new on the card. Action Plan Step 5: Repeat the process. Once your first credit card is paid off, you should remove the card from your wallet so you can avoid racking up a new debt! Then, take the amount that you were paying off that card, and apply it to your next card. In this example, you now have an additional £155 per month to put towards your Amex credit card debt of roughly £4,800. If you add this £155 to the £225 minimum payment, you'll have paid off that balance in no time. Another simple tip to avoid this sort of situation would be to simply only have one or two credit cards that you can easily manage and before embarking on starting a new card you should compare credit cards which are in the market at the present time to be able to get the best rates available.
Peter Carville is a freelance article writer who writes for Financial Facts about the current financial news and the credit crunch.
Article Source: http://EzineArticles.com/?expert=Peter_Carville
==== ==== This article talks about how to eliminate credit card debt. http://www.whatisdebtelimination.com/how-can-i-eliminate-credit-card-debt/ ==== ====