| Payoff Credit Card Debt |
| By Credit Federal |
Published
10/12/2008
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Debt Help
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Free Tips to Payoff Credit Card Debt
It's not as much fun to payoff credit card debt as it is to get into debt in the first place, but it's definitely much more rewarding financially. Just keep in mind that each extra payment you make is almost like saving money, because you are reducing the amount of interest you'd otherwise have to pay.
To find out the monthly payment needed in order to payoff credit card balances within a certain time frame, use our Credit Card Payment Calculator. All you do is enter your current balance into the first box, the interest rate charged by your issuer into the second box, and the number of months you want to have it paid off within into the third box. Example: If you have a credit card with a $10,000 balance at 20% interest and you want to payoff within 60 months, you'd enter: '10000' in the first box, '20' in the second box, and '60' in the third box. Click the "Calculate" button and you'll see; in this example, you'd need to send in $264.95 per month (without making additional charges). Our calculator will also give you other interesting data. It will tell you the total principal and interest paid, and will show you the Amortization calculations.
To find out how long it will take to payoff credit card balances based upon a certain amount you can pay per month, use our Credit Card Interest Calculator. Simply enter you credit card balance into the first box, the interest rate in the second box, and the amount you can pay per month into the third box. Click the "Calculate" button and our calculator will show you how many months it will take to payoff the balance by paying the amount you entered into the third box, plus it will tell you the total interest you had paid. You'll see; for example, that a credit card with a $10,000 balance and a 20% interest rate will take 72 months to payoff if you pay only $240 per month. It also shows you that you paid $7,215.26 in total interest.
But knowing how much to pay monthly; in order to payoff balances within a certain time frame, isn't helpful if you can't afford to send that amount in. You want to send in as much as possible while still paying your other bills, plus saving. If you don't yet have a personal budget, use our easy household budget calculator. We offer both an online budget calculator and a downloadable budget calculator.
After you know for sure how much money per month you can dedicate towards credit card debt payoff, you'll next need to decide which credit cards to payoff first. There are two main ways to determine payoff priority:
- Highest interest rate first...
- ...or, Lowest balance first
- Highest interest rate. If you first payoff credit cards with the highest interest rate, you'll save money over the long term. This is particularly significant if the highest interest rate credit card also happens to be the one with the highest balance, too. The drawback when the highest interest rate card also has the highest balance, is that it will take longet to payoff and you may become disheartened and give up. If you feel that may; or is, happening to you, switch to the 'lowest balance first' method.
- Lowest balance first. The personal satisfaction is much quicker by paying off the credit card with the lowest balance first. Getting a credit card paid off in full will help motivate you to payoff the other cards, too.
Pick the payoff method best for you, and begin paying off credit cards starting at the top of the list. Send the minimum payment to all your other credit cards. Once you've completely repaid the first credit card, cross it off the list and focus on the next card, and continue this process until all your credit cards are paidoff.
Use our online calculators or download our free software to your desktop to help you manage personal finances and track expenses:
Request professional debt relief assistance, such as credit counseling, debt management or to negotiate settlement.
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