How To Pay Off Your Credit Cards

By
Mortgage and Lending with Academy Mortgage.......We are a Equal Housing Lender CO NMLS2421 : NMLS 264534

How To Pay Off Your Credit Cards

In today’s economy credit card use is rampant.  It is sometimes used as the purchase method of choice because of the inherent built in protections (item warranty, identity theft protection), but often it is used to buy that ‘one thing’ you’ve had your eye on for a while, or to make ends meet until payday.

Whatever the reason for credit card use, the credit card balances, if not paid off monthly, can easily become overwhelming, and you might be wondering what is the best or quickest way to pay off your credit cards?

I have two different methods that can help you pay off your credit cards.  They both take discipline, and they both work.  One method is the Smallest Amount Method, and the other is the Interest Rate Method.   

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Smallest Amount Method:  this method will give you rapid results in your goal to pay off your credit card debt.  If you have many credit cards, this could be the method for you as you will see results quickly.  This method might also cost you more in the long run.

Steps to pay off your credit cards with the Smallest Amount Method:

  • First, make a list of all your cards balances.
  • Sort the list by smallest to largest balance. 
  • Pay the minimum payment required on each card, and put any and all extra money you have on the smallest balance card.
  • Soon you will notice you have paid off a credit card!  At that point, move on to the next smallest balance card.  Again, pay the minimum payment required on each card (including the amount you were paying on the card you just paid off), and put any and all extra money you have to your smallest balance card.
  • Continue the process by paying off the smallest balance card until your credit card debt is GONE!

Interest Rate Methodusing this method will take you longer to pay off your credit card debt, but in the end, this method saves you money.  If you have only 1 or 2 cards, this could be the method for you.  Be patient, you will see results.

Steps to pay off your credit cards with the Interest Rate Method:

  • First, make a list of your credit card balances and interest rates.
  • Sort the list by highest interest rate to the lowest interest rate.
  • Pay the minimum payment required on each card, and put any and all extra money you have on the highest interest rate card.
  • Eventually you will pay off the highest interest rate card!  At that point, move on to the next highest interest rate card.  Again, pay the minimum payment required on each card (including the amount you were paying on the card you just paid off), and put any and all extra money you have to your highest interest rate card.
  • Continue the process by paying off the highest interest rate card until your credit card debt is GONE!

      I wish you much luck in using either of these methods.  With a clear goal and some motivation behind you, you’ll pay off your credit card debt in no time!

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_______________________

Ellen Adams with Academy Mortgage 

18 YEAR VETERAN IN THE MORTGAGE INDUSTRY

    Phone: 541-521-7192

    Cell: 541-521-7192

    Email :Ellen.adams@academymortgage.com

   Website: www.academymortgage.com/ellenadams

    NMLS: 264534 

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Comments (6)

Torgie Madison
Quicksilver Real Estate Solutions, LLC - Portland, OR
Websites and Contact Management

Super informational post! I've always been a fan of the interest rate method, but that's because I'm a penny pincher at heart.

May 16, 2011 12:30 PM
Ellen Wright Adams
Academy Mortgage.......We are a Equal Housing Lender - Eugene, OR
LoansByEllen- Licensed in Oregon

I'm with you Torgie.  Great picture by the way!

May 16, 2011 12:32 PM
Retired from ActiveRain
Baker, OR

Ellen, When is it appropriate to use a debit card instead of a credit card for a purchase?  Good post.  Did you get drawn in the lottery for tickets to the Antiques Roadshow coming to Eugene soon?

May 19, 2011 03:20 AM
Ellen Wright Adams
Academy Mortgage.......We are a Equal Housing Lender - Eugene, OR
LoansByEllen- Licensed in Oregon

Rick:  Debit Card use is great for someone who trying to stick to a specific spending limit - i.e. with a Debit Card, if the money is not there, the charge is either denied OR the account goes into overdraft mode.  It's really an individual choice.

And yes, I did get the tickets to the Antiques Roadshow coming to Eugene Oregon.  So excited about it.  Here's the blog: Antiques Roadshow in Eugene Oregon

 

May 19, 2011 03:14 PM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Great tips ! Getting debt free takes a having a plan !!!

Jun 09, 2011 10:46 AM
Ellen Wright Adams
Academy Mortgage.......We are a Equal Housing Lender - Eugene, OR
LoansByEllen- Licensed in Oregon

Michael:  I agree - a plan is best!

Jun 10, 2011 04:45 AM

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