- © Score More Credit
How to Divide and Conquer CreditBad debt reduction is an essential step to clear the path for obtaining good debt. Getting out of debt is simply a matter of spending less money than you make on a consistent basis while covering all of your bills. If you are like most, this means conquering your credit card debt. Americans are over $1 trillion in credit card debt. Only one-third of all people pay their balance in full each month. Far too many people only make the minimum payment every month. Let's bust this myth once and for all that paying the minimum payment is sufficient. Did you know if you owe $1,000 on a credit card that charges 18 percent interest and make only the minimum payment, it will take you almost eight years (94 months) to pay off the debt and you will have shelled out $1,880? Take a look at how paying a little more than the minimum payment will save you big bucks while repaying the $1,000. To each payment Add you’ll save and you win $5 $330 32 months $15 $550 54 months $25 $620 64 months $50 $690 75 months The extra payments really add up. Now that we know the key to reducing debt is to pay more than the minimum, is there a right and a wrong way to do so? You bet. One popular method of debt reduction is to pay a little bit over the minimum on each credit card and make a bigger payment on the ones with the smallest debt. Practitioners feel that knocking the small bills out so that they are writing fewer checks gets them farther along paying down their debt than any other method. However, it's not the best or most educated way. |
| Resources | Blog | Support | Referral Login |