The fastest way for you to eliminate
credit card debt is to eliminate the big profit generator
for credit card companies, and that is, late credit card payment
fees and over-the-limit fees. Yes that's right, did you know
that in the fiscal year 2006, 31% of the the credit card industry's
profits or operating income came from late payment fees and
over-the-limit credit card fees? Are you part of an average
American family? Then you probably possess $8000 worth of credit
card debt and guess what? If you make only the minimum monthly
payments required on the debt, it will take you a whopping 30
years to pay off only $8000 worth of credit card debt! What's
more, you will end up paying more than $22,000 in interest rate
The fastest way for you to eliminate credit
card debt is to increase your minimum monthly payments and make
sure you do not have any late payments. Here are 3 simple steps
that will help you eliminate credit card debt very fast:
1) No New Debt
Do not rack up any new debt on your credit
cards, period! Hide your credit cards in a safe place which
is not easily accessible. Integrate this simple mathematical
equation into your life:
Will Purchase Something on my Credit Card -> "ONLY
I Have Enough Cash to Pay For It!
2) Set Your Mind
Post this message in your bathroom or your
cutting down our unnecessary expenses, we will raise enough
cash to pay off our debts in ____ months instead of the
original ____ months. The $____ we save in Interest Charges
will be put into our Savings account so that we can raise
enough money for down payment on a house, and live the
American dream as opposed to renting!
Use our Debt
Pay Off Goal calculator to see by how much you need to increase
your monthly payments towards a particular debt, in order to pay
off that debt at a specified future point in time.
3) Debt Payments Worksheet
Here is a sample Debt Repayment Schedule that
you can use. It is also self-explanatory.
1st, 2006 - Feb 28th 2007, you will make an additional $128
per month payment towards your Walmart Credit Card and pay
it off in 2 months. By tightening your budget and cutting
down on unnecessary expenses, you will get rid of your Walmart
Credit Card debt in 2 months! You will then use the freed
up $72/month to pay off your next debt, the Sears debt.
|By combining the
current $60/month debt payment with the $72/month extra payment
saved from Debt #1 (the Walmart Debt), you will be able to
pay off the Sears debt in ($600 / $132) roughly 4.5 months!
Upon then, you will have an extra $132 per month to pay off
your next debt, the Wells Fargo Debt.
|iii) Wells Fargo
|By combining the
current $120/month debt payment with the $132/month extra
payment saved from Debt #2 (the Sears Debt), you will be able
to pay off the Wells Fargo debt in ($1500/ $252) roughly 6
months! Upon then, you will have an extra $252 per month to
pay off your next debt, your Federal Student Loan.
|iv) Federal Student Loan
|By combining the
current $100/month debt payment with the $252/month extra
payment saved from Debt #3 (the Wells Fargo Debt), you will
be able to pay off your Federal Student Loan in ($3000/ $352)
roughly 9 months! Upon then, you will have an extra $352 per
month disposable income!
Use our sample debt repayment schedule above
to enter in the following characteristics:
- Interest Rate Charged
- Current Monthly Payment
- Additional monthly payments you can make (after
careful budgeting and cutting down on expenses)
Rank your debts according to their relative interest
rates. The debt with the highest interest rate is #1, the debt with
the 2nd highest interest rate is #2, and so on. Make additional payments
one debt at a time (debts with the highest APR charged). Trust me, this
is the fastest way to eliminate credit card debt and you shall be happy
with the results!
You are in to reduce your debts aren't you? Check
out our related article on the 10 crucial debt