How can I tackle credit card debt, and still have money on my checking account to survive? Strategies?
Sunday, October 25th, 2009 at
5:48 am
I һаνе 2 credit cards. Between tһе 2 οf tһеm I owe аbουt ,000.
I want tο pay tһеm οff, both οf tһеm. At Ɩеаѕt lower tһе balance tο ,000 (fοr now). Hοw саח I ԁο tһіѕ аחԁ still һаνе money. Aftеr I pay аƖƖ mу bills I һаνе аbουt ,000 left οח mу checking account.
HELP!!
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Tagged with: Checking Account • credit card debt • credit cards • Credit Debt • Money • pay bills
Filed under: How To Get Out Of Debt
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First, stop using them for anything. Cash only for all future purchases. Since you are carrying a balance, everything you add to the balance is instantly charged interest, making everything you purchase at least 15% more expensive. For example, a $40 dinner out is now $46 or more because you carry that charge on your card.
Second, go through all of the bills you pay and figure out how you can reduce expense. For example, see if you can downgrade Cable TV or cell phone plans. Bring your lunch and coffee to work. Don’t go grocery shopping and use up the stuff you already have in your cabinets and freezer. Take the money you would have spent on these things and instead go online and send it to the cc company.
Third, every week, go online and send the cc company $50, or better yet $7 a day. Just make it a promise to yourself. It will force you to find the savings from elsewhere in your budget and help put your attention on the little things that leak out of your budget every day. At the end of a year of doing $7 a day your balance will be half what you owe now.
Fourth, if you usually get an income tax refund, change your W-4 at the payroll department at work to get more takehome pay now, and put every dollar of that extra pay toward your cc debt (and, yes, in addition to the $7 a day mentioned above).
Fifth, if you bought anything on the cc that you haven’t used, try to return it to get store refunds posted to your account to reduce the balance.
Sixth, see if there is some expense you now have that you can completely eliminate and use that to add to your daily paydown. For example, gym membership?
Seventh – Do things to help reduce your utility bills, such as suggestions on http://www.energystar.gov, and use that money to help pay off the cc.
Eighth – find ways to increase your income. Look for chances to work overtime, or get a second part time job. If you get a raise at work, don’t spend it. Use the extra to pay down the cc. If you can find a way to increase your income by $75 a week with a part time job, and decrease your expenses by $25 a week, you can be all paid off in a year.
Last – be smart about how you apply your payments. You want to pay the most on the card with the highest interest rate. So, if one charges you 15% and another charges 9%, pay just the minimum amount due on the 9% one, and every penny you can find against the 15% one. That will have more results for you over the long run.
Good luck.