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Credit Card Debt is a Killer
The credit card was originally designed so that people who went shopping did not have to carry around a lot of cash or try to write checks that were hard to get accepted. At first, department stores offered credit cards, so that, as adults shopped for themselves and their children, the plastic could be used quickly and easily. Following department stores, other major retailers began to do the same. The advent of the “major” credit card was another milestone in the overall use of credit, because now people could carry only one or two cards and shop virtually everywhere, no matter where in the world they were.
The use of credit cards is now universally accepted, by hotels, restaurants, retailers, grocery store, and gas stations, to mention just a few. Internet shopping requires either a debit or credit card. Shopping has become so easy, and merchandise so accessible, that individuals without good self-control find themselves pulling out those cards for virtually everything, racking up huge balances, and then trying to pay them off by making small minimum payments each month. The debt goes on and on, for as long as 30 years, if only minimum payments are made.
Getting the Debt Eliminated By “Smart” Paying
If you find yourself with several credit cards and are making only minimum payments, you need to consider a planned program for getting them all paid off as quickly as possible. The feeling of being debt-free is amazing. The steps are pretty easy to follow:
- Take all of your credit card balances and divide each one by the minimum payment you are making. The result will give you a number of months. Write down each result.
- Make a list of your cards, starting with the one that has the least number of months, progressing down to that which has the most number of months.
- Credit card #1 is the one you will attack first. Pay as much as you possibly can on that card while continuing to make minimum payments on all of the others.
- Once card #1 is paid off, take the amount you were paying on it and add that amount to the payment of credit card #2, until it is paid off.
- Continue down the line until you have paid off every card. Your payments to each card will continue to increase because you are rolling all of the payments on previous cards to it.
You will also want to take advantage of any zero per cent interest cards offered which allow you to transfer balances for no fees. Be careful to watch for the end of this introductory rate, however, because the interest can jump sky high. But, during the introductory period, your balance remains steady, because no interest is being charged at all.
The other important thing to keep in mind is that irresponsible spending got you into the mess to begin with. You will need to develop a plan for becoming a responsible consumer, planning purchases and being willing to do without some luxury items until you can really afford them.
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