Pay Down Your Credit Card Balances

Written by , June 27, 2011

Pay Down Your Credit Card BalancesThe credit card is one of the most popular inventions of the 20th century. It made it possible for consumers to buy what they wanted when they wanted it without worrying about paying for it right away. But with that convenience comes a price. The longer it takes you to repay the amount you borrowed, the more the credit card company makes, and the more money you pay for that convenience.

Credit card companies are laughing all the way to the bank, because many borrowers tend to take their sweet time paying off their balances. That means more money for the creditor. And it means more money coming out of the borrowers’ pockets. But if you pay down your credit card balances quickly, you’ll save money and you’ll be the one who gets the last laugh.

Here’s some advice how you can pay down your credit card balances.

  • Look at the interest rates on each of your credit cards. The one with the highest interest rate is the one you’ll want to pay off first, because it’s costing you the most. Start paying the minimum balance on that card each month, plus ever other penny you can scrape up to put toward it. But make sure you’re paying the minimums on all of your other cards, too.
  • Keep paying as much as you can toward that debt until it is paid off completely. Then go out and celebrate. You deserve it.
  • After your celebration, get to work on the credit card with the next highest interest rate. Pay the minimum payment on that one, plus the amount you were paying on the first one you paid off. If you do this, you’ll end up paying off the second card faster than you paid off the first one.
  • If you have another credit card, pay the minimum payment on it each month plus the amount you were paying on the one you just paid off. You should get this one paid off even quicker than you paid off the others, unless you have a large outstanding balance.
  • Repeat until you have all of your credit card balances paid in full. It might take a while, but it will keep getting easier with each bill you’ve paid off.
  • Credit card debt is often the worst kind of debt, because it has the highest rate of interest. But as daunting as it may seem, paying your credit card debts off in full isn’t all that difficult. By starting with the card with the highest interest rate and working your way down, you can save yourself lots of money. And once you’ve gotten all of your credit card balances paid in full, you can start putting more money toward savings, which will help bolster your finances for years to come.

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