What is the best way to pay off a credit card that is maxed

Question

We pay are bill on time but it doest seem to be goin down we cant afford to pay all at once?

Answer 1

The reason it never seems to be going down (no matter how long you've been paying on it) is because most credit cards keep their Minimum payment lower than the Finance charge.  So you can basically pay the minimum amount for 20 years and never pay on the principle.  Your best bet is to pay at least twice (if not more) the minimum due amount.  How much you pay in extra finance charges over the course of paying it off is severely reduced by how quickly you can pay it off.

Answer 2

If you pay only the minimum payment on a credit card bill each month, it will take 30 years or more to pay it all off since you also have to pay interest charges on the balance.  In order to pay off the credit card you need to make payments that are larger than the minimum.  Even if you can't pay it all off at once, pay all that you can on the amount owed.  That will lessen the amount of interest chatged on next month's balance.  If you keep making larger than minimum payments it will pay off the balance quicker.

Answer 3

Categorize your bills by how much you owe to the company that issued the bill. Continue to pay the monthly payment on all the bills, but pay off the smallest bill you have. Next month take that additional money you would have paid for that smaller bill and than pay off the next smallest bill. Continue this and than you'll be paying more money on your credit card when you get to that step. It's called the Snowball Process in financial terms if you want to look it up.

Hope that helps!

Answer 4

If you just have the one card, you might try negotiating with the company for a better rate, with a promise to pay twice the minimum payment each month.  They want their money, so they might agree to that.  If you have more cards, and are willing to stop using all of them, go to a Non-Profit Consumer Credit Counseling.  They will get those interest rates reduced, and pay off the accounts for you in just a few years.  They train you to use credit more wisely, and they will get you out of debt. Be careful about going to companies who ask for money up front, though.  They sometimes harm your credit more than helping it.  The one we went to is found at this website.  Good luck to you.

http://www.moneymanagement.org/

Answer 5

if you are only making minimum payment it will take years/if ever to pay it off...Look at your statement...see how much of your payment went to interest...if possible start making your payments: amount of interest + say $100.00 (more if you can afford to)...it will be slow going but the more above interest you pay each month (without charging new on it) the faster you will get it paid off.

Answer 6

Hey Nancy,

First, congrats on trying to get out of debt. If you have several debts that you're trying to eliminate I would suggest two articles.

The first is "Get Rid of Debt Once and For All… with a Snowball". You can find this article at http://blog.money-and-investing.com/44/g...

It's a silly title, I know, but I’ve seen people that have struggled with their debt for years turn their lives around pretty quickly with this method. The debt snowball method provides rewards along the way, and these rewards encourage you to continue paying off your debt. The other major benefit of this approach is that it instills good money management and saving habits without you even realizing it. By the time your debt is gone, you’ll be a disciplined wealth-building machine.

The second article I would recommend is "20 easy ways to save money without sacrificing your lifestyle or happiness" at http://www.money-and-investing.com/Easy-...

The list contains many great ways to save more without making many personal sacrifices. The best part about these types of habit changes is that, not only will they save you money, they are more likely to become long-term habits since they don't require giving anything up.

Good luck! It's fun to watch people get out of debt and begin their wealth-building journey so post back here often to tell us about your progress. (-:

Cheers!

Odd Lot

Answer 7

Pay as much as you can each month and not just the minimum they ask for