Cancel Credit Card Debt - 4 Keys To Success
In financial terms, a credit card can be your best friend or your worst enemy. Debt can be painful, and minimizing that pain should be your number one goal. Thankfully, there are time-tested ways to pay down your credit cards and improve your credit scores. Here are 4 keys to success.
First Key - Get agreement from your Significant Other: Trying fervently to pay down debt while your girlfriend, boyfriend or spouse continues to spend, spend, spend is like trying to fill up your tub with the drain plug pulled out. Be sure to have an important talk or two with your significant other concerning your plans for paying down your credit card debt. Getting their buy-in is a crucial step in making your plan work.
Second Key - Close the accounts of your higher-interest cards: If you have more than 3 or 4 credit cards, transfer the balances from your higher interest cards to your lower interest cards. Then, as you pay off your cards, start closing out your higher interest accounts. Caution: be careful not to close too many accounts too quickly, especially if you have very high credit card debt across all accounts. It is important to signal to lenders that your debt ratio (total amount owed divided by total credit line) is no higher than 25% to 50%. If over 50%, wait until it dips to about 25% and then start closing the accounts for those higher interest cards, one by one.
Third Key - Use only one credit card actively: By continuing to make small charges on one of your cards and then paying down the balance each month, you are demonstrating to your lenders that you can handle your debts. However, 80% of your monthly expenses should be paid in cash only. This will get you into the practice of only spending what you have.
Fourth Key - Stick to a monthly budget: Pay your monthly expenses following a strict budget. Then, I suggest setting up an automatic payment each month for your higher-interest credit cards. Have the payment be deducted from your account each month on the day after you get paid. (You can always temporarily disable the payment if you have an emergency situation one month where you need the cash). Doing this, you are really paying yourself first each month, before paying your other expenses. You are in effect investing in the ‘future you’ by eliminating his or her debt, bit by bit.
By setting up and sticking to to a set of common-sense rules, you can successfully pay down your credit card debt faster than you ever thought possible.
A 50-point gain in your credit score can mean $1,000s less in debt payments each year. Improve your credit score up to 200 or more within 90 days at: http://www.success-junky.com/
Tags: credit card debt, eliminate debt, get rid of debt, no credit card debt