Paying off credit cards is not an easy task. You must determine what your goals are. Are you looking to improve your credit scores and rating? Are you looking to save money on the interest? Or are you looking to get rid of the debt because you are tired of making those monthly payments?

Below are several different tactics for paying your credit card debts; each of which will produce varying results. You will have to determine what you are looking to accomplish and choose the strategy that is best for your needs.

Lowest balances
Paying off credit cards with the lowest balances first is a tactic that is commonly known as ‘snowballing’. You pay off the credit card with the lowest amount owed and then contribute the same or more amount of money towards the next lowest credit card. The idea is that the momentum you build from paying off each card will allow you to continue paying off all of your credit cards until the amount owed is $0.

Highest interest
Paying off credit cards with the highest interest rates first is a tactic for saving money. High interest equates to more of your payments going to the credit card issuer and not the principal. Therefore high interest credit cards not only cost more money, they take longer to pay off. If you choose to pay off the high interest cards first, pay as much as you can and as fast as you can.

Most credit limit being used
Paying off credit cards that have the most of their credit limits being used is a strategy for raising your credit scores. If you have multiple credit cards that are close to maxed out, pay down the ones with the highest interest rates first.

Cards that are delinquent
If you have cards that you are late on you need to pay them and attempt to pay them off completely as soon as you can. Since you’ve been late on payments, these cards are either going to have higher interest rates and charges associated with them or will be sold to a collection agency if you have not made a payment for an extended amount of time (usually 90 days). If your credit card debt goes into collection, then you will have two negative marks on your credit report; the original credit card debt and the collections. And if your balance is high, it is very possible that the collection agency will sue you for the money owed. Therefore, it is very important that you pay off your credit cards that you are delinquent on to avoid all these hassles.

No matter what your approach is, paying down your credit card debt is a smart move. As mentioned above, which tactic is best for your needs is for you to determine.

Managing Debt
Loans for Paying Off Credit Cards
Good Debt vs. Bad Debt
Changes In Spending Habits
Early Warning Signs of Debt Trouble
Planning a Budget is a Good Strategy
Budgeting Tips
Problems With Overspending
Fixed Expense vs. Discretionary Expenses
Locating a Financial Counselor
How to Save Money If You Have Kids
How to Save Money by Changing the Way You Buy Food
Dealing With Creditors
Dealing With Collection Agencies
Effects of Technology On Consumer Spending Habits

Use Credit Cards Wisely




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