paying off credit cards tip

[Team Syntek]

I read this somewhere and although it didnt originally make sense to me....it worked 100% and I am very thankful today....

I had 3 open credit cards with balances ranging from $1200 to $8000 and there was no end in sight. I made slightly above the minimum payments each month and they just kept eating me alive. Well, my plan worked out great and Im on my way to closing out my last card next year. Here's the scoop:

Look over your monthly budget, look at the places where you might be able to trim $10 here, $20 there, etc. For example, less money on entertainment on the weekends or packing lunch versus buying every day. Downgrade your cell phone bill or cable bill. Check with your auto ins agency to see if you are eligible for any new discounts.

Take that money and any other resources you have, and put it all towards the smallest credit card. Thats it. As soon as the small credit card is gone, roll that money right into the next biggest balance and so on....

Simple and very effective!

[Team Syntek]

Also, I neglected to mention about rolling high interest cards into 0% cards but thats pretty obvious!

[disneysteve]

You've just relayed the same info that Dave Ramsey has been promoting for years - the snowball method of repaying debts. Yes, it does work. Financially, it is better to repay debts from highest to lowest interest rate but doing it from smallest to largest amount works as well and can be more psychologically motivating for those who need that mental boost.

[Team Syntek]

YES - that's the name I was thinking of! A coworker must have read his books and shared that with me in her interpretation. I am still paying for mistakes I made 7 years ago, at the ripe young age of 22. It was an age of no limits and endless credit....and my young mind couldnt separate the fact that I had over $10k at my disposal...but shouldnt touch it.

If anyone isnt sure in this day and age how destructive they can become....TRUST ME...LEAVE THEM ALONE. For years I was spreading out my 3 payments evenly, just slightly above the minimum amount. Well after 2 years those balances were almost untouched....made me sick to stomach when I looked after a year's worth of payments.

So, 3 years ago I began doing the "pay down the lowest" card method mentioned above and sure enough it worked. Paid off 2 of the 3 cards and its snowballing fast now. Soon I'll be down to none! An end to a 7 year nightmare!