While charging up your credit cards, you don’t realize that how big the
repayment issue can become. When you are neck deep in debt and just
paying the minimums and nothing else, it is better that you become
serious about how to pay off debt soon.
According
to the debt professionals, the most effective way to eliminate your
debts is to knock off the balance with the highest interest rate in the
beginning. When this debt is repaid, go for the debt that has the
second highest interest rate.
You should always remember to
settle the debt with the highest interest rate initially. You must take
stock of your bills according to the interest rates instead of the
amount of balance.
You can also adopt an alternative plan by
paying off the debt with the smallest balance first. It can give you
the momentum that you require to follow a pay-down strategy. As soon as
those small balances disappear, you should return to plan A: get the
money that has been earmarked for paying those bills and utilize it
towards the debt that has the highest rate of interest.
The
secret of being successful in debt repayment is sincerely following a
useful pay-down strategy. Don’t take a break from making the minimum
payments while you are getting the bills repaid.
You should
think prior to doing something. Analyze your finances and find out how
much you can practically manage to pay on a monthly basis. You should
monitor your expenses every day. This would help you ascertain the
amount that you can afford to repay your credit card debts. Experts
recommend that simply paying $50 more per month can be of great help.
You
should try to pay higher than the minimum. The debts would begin to
wane. Paying higher than the minimum not only pays down the interest
but also the principal. It would also shorten the repayment tenure. You
can use the credit card minimum payment calculator to find out how your
repayment term is reduced by raising your payments.