Credit Card Debt: How To Deal With It
Do you have a hard time paying your credit card bills? Starting
to get notices from waiting creditors to pay? Worried that you
might lose your properties like your house because of credit
debt? Chin up: Dealing with credit card debt is not as...
Debtor's Ethic
Faith Fellowship Church…PO Box 1586…Broken Arrow, OK 74013…Pastor Terry Dashner…918-451-0270 “Beware of the Debtor’s Ethic” “Good deeds do not pay back grace; they borrow more grace.” John Piper Can a bad motive spoil a good deed? Should we, the...
Debtors Prison, a Brief History of Bankruptcy
In Ancient Israel, every 7th year (Sabbatical year) the debtors
were forgiven some of their debt and every 50 years (the Jubilee
year) all debts were to be discharged, some mortgages released
and all indentured servants and slaves were to...
Getting out of debt is a decision, and it's the right decision! Get yourself out of debt today!
Our society encourages debt, it really does. How so? Simply put,
we are encouraged to borrow money, to live beyond our means, to
gratify ourselves now so that we can have it all and be happy.
But are we happy being in debt? Do we truly get...
How To Get Out Of Debt?
If you are in debt up to your ears like many other people, there are a few ways available to you to get out of debt. One of these ways is called debt consolidation. This is actually a refinancing of all of your debts, whether it be credit card or...
Crushing Credit Card Debt
How much do YOU owe on your credit cards?
The average American family is now over $7000 in debt just on their credit cards. That debt generates an interest charge of over $105 each month if your card charges the average 18%. If you have missed a payment or made a late payment (even by one day!), you may be paying up to 27% interest or over $157 each month.
Most credit card companies require a modest payment towards the card balance. Modest meaning from $10 to $20 a month. To pay off a $7000 debt at $20 a month you will not pay off this debt for 29 years.
And what about those interest charges? Paying off a $7000 credit card debt charging an interest rate of 18% and paying $20 a month towards the debt, you will pay over $18,400, more than TWICE the original debt, just in interest.
What if you have more than one card? What if your debt is over $7000? What can you do? How can you get out of this hole?
There are some techniques that can help you pay off your debt and do not require expensive loans, invasive credit checks, or expensive financial planners and accountants. You can also save on interest charges by paying off your debts in a certain order.
The most effective technique is sometimes called the "snowball" method. The snowball method suggests that when you pay off one debt you apply that payment amount to the next debt. Thus the amount you pay on a debt grows like a snowball rolling down a hill.
For example, you have three credit cards with debts of $5000, $4000, and $3000 which are charging you 18%, 27%, and 12%, respectively, and you are paying $150, $125 and $100 each month. By paying these required monthly amounts you will pay off your $3000 credit card first.
Now that the $3000 card is paid off you have an extra $100 a month. Put that extra $100 toward paying off your next credit card debt. Now you are paying $225 a month on the $4000 card and the $150 on the $5000 card. With this accelerated payment on the $4000 card you will pay off the card earlier and save some money on interest
charges.
Then apply the $225 payment to the $5000 card for a monthly payment total of $375. Soon this card will be paid off and you will have $375 extra each month to pay off other debts or better yet, INVEST!
So, which debts should get paid off first?
Generally, you want to pay off the debts that are charging you the highest interest rates first. In the above example you could have added the $100 payment to the $5000 credit card rather than the $4000 credit card. But the $4000 credit card is charging you 27% where the $5000 credit card is charging 18%. By paying off the card charging the higher interest rate first, you will save some money on interest charges.
If this sounds too confusing, you can enlist your computer. You can search the Internet for the keywords "debt reduction calculator" or you can visit href="http://www.simplejoe.com/debteraser/index2.htm">http:/ /www.simplejoe.com/debteraser/index2.htm and review a product named Simple Joe's Debt Eraser.
Simple Joe's Debt Eraser helps you create a href="http://www.simplejoe.com/debteraser/index2.htm">Rapid Debt Reduction Plan that is customized to your debts and your situation. Just enter your debts and the amount you can afford to pay each month. The software will create a plan telling you how much to pay towards each debt each month until they are all paid off.
You CAN pay off your debts. The trick is to stop charging purchases to your credit cards and develop a debt reduction plan. Your plan should include "snowballing" your payments and prioritizing the debts by high interest rate.