If you maintain a balance on your credit cards you’re probably paying hundreds of dollars each year in interest. This is money that could be put to better use.
There is a simple method of paying off credit cards that does not require too much extra money each month. This method is called payment snowballing. While your biggest gain will be from paying off credit cards, you can also take this method to pay off installment loans, medical, your mortgage, and other bills.
Additional Information on Better Paying Job
By snowballing your payment you start paying off credit cards and adding the money you were paying on the paid off credit card to the other one. This is either of the quickest ways to eliminate your credit card debt.
There are two schools of thought about which way is best. Many experts believe that paying the credit cards with the highest interest first is best. You then go to the credit card with the next highest interest and so on. Personally, I believe people got to see results quickly. I recommend paying off the credit card with the lowest balance first and then go to the next lowest balance, etc. Whether you begin with the highest interest rate credit card or the guy with the lowest balance it will ultimately obtain the same results.
Some Random Thoughts About Better Paying Job
Pay Off Your High-Interest Rate Credit Cards : There is nothing worse than having credit cards that have a great deal of money on them, with a large amount of interest. You should NOT pay off your credit cards by paying the monthly minimum each month-that’s what the credit card companies want you to do! They want you to pay it off your whole life so you end up paying much more in interest. Try to pay off your highest interest rate credit cards first-then work on your high-interest rate student loans. When you’re finally done paying off your debt, the feeling is complete freedom! It will be worth it.
Your next step is to determine your scheduled payments for each credit card. It is best to establish a constant payment at or slightly more than the minimum payment to all of the credit cards except the one you’re currently trying to pay off. Keep paying this constant payment month after month even though your minimum payment will go down. This alone will make your balance go down quicker than paying the minimum payment.
Refer to the sample payoff schedule. You will see that the Visa Card will be paid in the 4th month, requiring only a $15 payment of pay off. These figures are only estimates because they don’t include interest.