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Sunday, March 18, 2007

6 steps to credit card serenity

USA is a country that is swimming in credit card debt. A quick Google search shows that the average US household debt is around $10,000. I was buried under a five figure credit card debt until a few years ago as well. For those of you who are trying to cope with it and working towards a place where you are debt-free, Bankrate.com has some tips on how to get there.


1. Know where you stand – …make a list of exactly how much you owe and
what rate of interest you're paying on each card. Then list your cards in order
of highest rate to lowest.
2. Pay highest-interest cards first – …
These cards are the ones that are costing you the most over the long run so you
need to make every effort to pay more than the minimum payment each month on
these bills first.
3. Get a better deal – Call the toll-free
number for your highest rate cards and ask the customer service representative
if she can give you a better deal.
4. Consider using a different card –
Hang on to all those zero percent and other low-interest credit card offers
you've been getting in the mail. Done well, transferring your high interest
balance to one of these cards can save you an enormous amount in interest and
put you on a solid track to paying down debt.
5. Beef up your credit score –
If you make all your payments on time over the next six months and aggressively
pay down your biggest balances first, you could improve your score as much as 50
points
6. Avoid penalties and fees – Interest rate hikes and hefty monthly
fees can ruin even the best-laid pay-back plans. Avoid: Late payment penalties.
Penalties for late payments on any card. Credit Limit Fees



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