Tips for paying off credit cards quickly...?

Question

I'm 19 and have 4 credit cards. Now please don't assume I've been irresponsible with my cards, because I really haven't been. I've never missed a payment and I always pay more than the minimum. But I've come to realize with the large amounts I've paid in interest, I could have already had other cards paid off. My credit score is 697, and I know closing the accounts will just lower my score, and I don't want that to happen. My balances are as follows: $386 with 21.1% interest, $949 with 16% interest, $643 with 19% interest and $589 with 26% interest.

So please, any advice would be great! Thanks everyone!

Answer 1

Those are some high interest rates!  You can consolidate it onto one credit card. Sometimes you can get special balance rate transfer offers that are a low rate for a fixed period of time or a low rate until the balance is paid in full.  Check with your credit card companies.  A drawback is that there are usually transaction fees - typically 3% of the amount transferred (some have a maximum fee they charge, some don't).  

If you don't go the balance transfer route, I would pay off the card with the highest interest rate first, then the next highest rate, and so forth.  Interest is basically throwing money away so that's why I would pay off the 26% card first.    

You can take out a debt consolidation loan.  You could check with your bank to see what the interest rate would be for that and if you can get approved.  

You mentioned closing the accounts.  Even if you close them, you still have to pay the balance owed before it is fully closed.  What would happen is you could not charge anymore on those accounts, but you do have to pay back, at the terms agreed upon, before the accounts are considered closed.  

Good luck!

Answer 2

Is there a way you can pick up a second job for more income to put towards the cards? Try selling on Craigslist or Ebay. Cut out the little extras in your life ie...shopping, movies, etc...to free up more money for your balances.

Keep the cards but stop using them. Try to pay off the lowest balance first even if it means making min. monthly payments to the other 3 for a short time. Use Dave Ramsey's "Snowball" technique until you have your debt paid off.

Those are some high interest rates.

http://www.daveramsey.com/etc/cms/index....

Have you tried transferring your credit card balances to a low apr credit card offer? While this isn't the best option it might be an opportunity to look into. I always get offers from American Express Blue for a 2.99 rate. Fortunately, I'm debt free...but I've been in your shoes years ago.

http://www.creditcards.com/credit-card-n...

Answer 3

you have 2500 dollars in credit card debit, that is something to start getting worried about... Those are some really high interest rates. why dont you just take the credit card with 16 % and pay put it all on that card and get rid of the other 3.. why pay the extra interest on the other 3 cards?? Your credit score is not as important as everyone thinks but consolidate everything onto one card and stop using the other cards... i dont beleive in paying someone %20 interest on my money.. i like to save up the money first then pay CASH

Answer 4

You haven't been irresponsible with your credit card payments, but you made poor choices with your personal finances.  It can be challenging, but try not to borrow money that you don't have in the future.

To answer your question, tackle your debts in this order.

1 - $386

2 - $589

3 - $643

4 - $949

When you are done with the first credit card, roll that payment and snowball the payment to #2 credit card.  Get an extra job for a couple of month and you can easily get rid of these annoying credit card payments.  

Closing your credit card "could" hurt your credit since FICO score is a debt score, but closing a relatively new account with small credit line is better in a long term.

Answer 5

Of course a consolidation at a lower interest rate would have the most economic advantage. My feelings though, if you want to keep the accounts open, is to pay the highest balance down the most. I know that you save money by paying down the higher interest rate card first, but for me, I hate large balances. Pay something more than the minimum on all four, but pay all you can afford on the highest balance. In an emergency that gives you a greater amount you can borrow to your limit. And if need be, you can borrow from a low interest account and pay off a high one if you get the balance low enough. Any interest rate over 20% is good to get down.

Answer 6

Look into banks near you that give bill consolidation loans(usually 5-7%), borrow the total amount you owe on the four, and then payoff the bank loan as you can. You'll save a lot on interest and be a lot better off financially.

Answer 7

If you pay interest on cerdit cards, then you HAVE been irresponsible.  Cut them up at once!  Pay cash for everything.  Listen to these posters about the debt snowball and Dave Ramsey.  You are throwing away your financial future when you use debt.  I've been in your shoes.  You have a chance to become wealthy later in life by getting rid of this debt NOW and staying out of debt.

Answer 8

I agree with some of the other postings.  List your debt in order smallest to largest.  Take all your extra money and apply it to the smallest loan while making minium payments on everything else.  I would suggest picking up a s econd job or more hours at work to get the debt snowball rolling.  But you do need to get these paid off right away.  Look into a book by Dave Ramsey called "The total money makeover" he will teach you how to live without debt and how to pay your bills off quickly.  Best of luck you can do it.

Answer 9

I recommend a program method called DOLP you take your balance divide it by your monthly minimums. The lowest score is the account you should focus all your money and attention on while the rest you simply pay minimums. It has worked for me very well. You might want to give it a shot.

http://finance.yahoo.com/expert/article/...