DebtEliminationTips

Debt Management is a huge topic these days and is needed by so many people today. With all the current confusion in the market what choices have you made and was it the right choice for the right reason.

There are many companies popping up out of the woodwork , some are trying to help and some are just out for your money. So it very important that you understand what the company you select is actually doing for YOUR problem and that it is not going to hurt your current debt situations. You are after all more then in a vulnerable position and companies may take advantage of you.

Here are a few guidelines and questions you should be asking your debt management company:

1. Is there a monthly fee for your services and what will be included in that fee, remember that any extra money you can have towards your debt will be valuable to you so don’t give it away easily.

2. How does the solution they provide effect your credit, make sure this is clarified as they will probably tell you that it will not be effected until the credit card company closes your account. This is not to your benefit and in a lot of cases will happen if you make the wrong choices.

3. What exactly will they be providing you for your money, dont excpet a generic answer or you may be spending your money and not get the proper return.

Things you should expect from a good debt management solution:

1. The debt management solution should be ALL about your needs and how they are going to help YOU with your problems. So if something they are telling you doesnt sound right , make them expalin it again and provide you a proper justification for why you are doing something.

2. A debt management company should have a solution that will adapt to changes in your financial life, and be constantly working towards improving your situation. Keep in mind that you did not in debt over night and you will not get out of debt , but a good solution will provide a path that will grreatly reduce the time frame needed to get out of debt.

A good debt management firm will help you with everything from creating a budget to analysing your current expenses and offer some valuable suggestions possible reductions. Corecting a debt issue is much more then just understanding how much you owe, but also what else can be reduced that will allow you to reduce your debt faster.

Even if you have already started a solution dont hesitate to search out additional resources as not all programs are created equal. You will find a lot of good free resources that you can utilize , but do not hesitiate for one second to consider a pay solution if they can prove to you that they can handle your debt issues. Make sure they either have a money back gaurantee or provide service before payment.

Debt management is something I take seriously and so should everyone who reads this post, starting a corrective action today will save you thousands of dollars and prevent losses in your lives. I wish everyone good luck and if you do not contact me to handle your debt issues please contact someone , it may just very well be the best move you have ever made. My company stresses that it is concerned about providing you a solid debt management solution using proven techniques that will help anyone willing to work hard debt freedom.

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With so many different debt solution out there it can sometimes be confusing as to what would make a good pick to fit your needs. It certainly doesn’t help that thereis a lot of mis-leading information designed to confuse you, in the hopes that they can sell you a product even if it wont work. Here are the guidelines I would use when considering a debt solution to meet your needs.

First question you have to ask yourself is what do you want out of your debt solution? . Are you just looking to handle one particular debt, several accounts or are you attempting to eliminate all your debt.

Some debt solutions will suggest for you to just make more then your minimum payment , while this will certainly help you pay the debts faster… is it enough? If you only had one debt to deal with this may be sufficient for you, but there are more efficient ways to increase your debt pay-off. Not to mention that if you did this for more then account at at time you will be spreading your money too thin and hardly making a big enough dent on your principal. So if this was the suggestion of the plan that I was reviewing it would be put on the bottom on my list.

Another very popular suggestion from other debt solutions are to attack your highest interest rate cards first before your lowest interest rate cards. While this may seem like a good idea in reality it is not and here is why , if you look at your goal of trying to eliminate your debt. Lets just say for argument sake that we an extra 75 dollars that we are applying, you pay less off of the account with higher interest due to the interest rate, so does this really make sense..?. You only have so much money typically to apply so best put it where it will efficiently work FOR YOU ….NOT THEM . I would be wandering who benefits from this type of setup and who stands to gain more them or you. The only exception to this is an 0% interest rate card, if you know you will pay it off before the rate will increase then continue that path. But if the card has a time limit before it will increase you should apply everything you can towards that card as it subtracts 100% from your principal. The benefit there would be that you have the possibility of paying it off, giving you the amount you were paying on it to use towards another card.

Now for the last debt solution that I am going to discuss today involves a systematic approach to eliminating your debts. Not knowing what you have to work with we will use and example I have created for demonstration. In this example we have three credit cards, a car payment, and a first and second mortgage. We will not even be looking at the mortgages or the car for the moment,, just keep making the minimum payments on those for now.

But here is how you would handle the credit cards and the reasoning behind handling them this way. Using your favorite spreadsheet program or paper if you prefer, line all your debts up from the lowest balance to the highest. You would continue to pay the minimums on the two above the one with the lowest balance, as the minimums decrease add that amount to the one with the lowest balance. Funnel all that you can towards that debt first, any funds above your minimum should be made as an extra payment on the first day that your credit card posts for the next month.  Let me explain that so it is clear why… lets say you have 50 dollars extra consistently not including the reductions on the minimums of the other cards, which you would add to this amount. If you apply it on the first day of next months billing period you will reduce your interest charges for approx 28ish days for the amount you have lowered your balance. This will have a big advantage for you as it will one lower your interest costs immediately and apply more towards principal. these two things in combo will dramatically reduce how long it takes to pay off that debt, once you are done you can then roll that amount back up towards the next debt , except you will now use that full amount to pay as the extra amount on the first day of that billing statement, once your credit cards are gone attack your car then your second and first mortgages. If you are motivated you can easily pay off everything you owe in 7-10 years, which beats 30 years assuming you don’t do a debt consolidation along the way.

Well I hope that this information has been helpful to you .

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Credit card companies are very unforgiving even in today’s economic issues that we are all facing. Miss one payment and they will increase your rates to a very high rate , this will cause each and every payment therefore after less effective. Now that you are in this situation doesn’t mean you give up , instead you should be working hard at correcting the issue . Here are the steps I would take to get your interest rates back down to a manageable level.

First off make sure you understand how you current balance to maximum allowed balance works. To keep from effecting your credit you should never charge more then 40% of your maximum credit limit. So if you have room on other cards and can get a decent balance transfer to a card you already own this would be a good option. The reason you would do this is to lower the balance on the card with the huge rate as it takes at least 6 months of spotless payments to actually get your credit card company to budge.

Now I realize that missing payments are not usually something you do on purpose but somehow you need to sit down and track your money so you do not miss anything, as a matter of fact you should have all your bills paid by the third week if possible.  at the 6 months mark you should be calling your credit card company and asking for a reduction in your interest rate . Never take the answer of the first person ask for a manager , Mention that you have balance transfers to other companies and would rather keep your money with them but the rates and charges are giving you little options . Chances are they will fight a bit but should budge at least a little bit .

If they do not want to play ball then ask then if they have any product upgrades or transfer to a different card such as a card with rewards. It is important ti use the terms product upgrade or transfer , they will more then likely find a card that they are able to transfer your balances . Here is the benefit as you are already a customer it is an internal transfer and you will receive the default rate for that card, this will likely take from the high 20% ratio to about 12-14% . This will save you a ton of money that you would have been loosing in interest charges on the higher interest rate card.

Now that you have successfully gotten your rates back down to a reasonable rate , do not miss a payment  as you will not likely have this option available twice.

Hope this helps and good luck

This post was created by: http://www.debt-elimination-services.net

Have you ever noticed that you have been paying your credit call bills but they never seem to really move in your direction. There are many reasons why this occurs and once identified can be corrected in your benefit , not your bank or credit card companies.  Following the steps outlined here will greatly increase your payment efficiency and help you get out of debt faster.

The first rule of thumb is that you should only be concentrating on one of your debts at a time for maximum efficiency. Spreading money out across multiple debts is not going to provide you the same impact as it will paying it on one source.

Zero percent interest cards should be the first on your list, if you happen to have any of them use them to your advantage. They are usually short term rates but will allow to reduce your overall balance quickly.

Even though you may be tempted to move around and attack different types of accounts you should consider the following before starting. Credit cards fluctuate in minimum payments unlike other types of debt and this will useful to you later. Once your interest free cards are gone you should line up your debts as follows.

Starting with the lowest balance card apply your minimum payment to this card no later then the 3rd week that it is due, using the amount that you had been paying on your previous card as an extra payment. Only pay this once your previous months statement posts so that this additional amount will reduce your interest for the next month and increase your principal payment amount. Doing this consistently month after month will show you an improved efficiency in reducing your principal balances.

If any of your other cards reduce their minimum payments roll that amount down to the debt you are concentrating on currently as part of your extra payment. This has the possibility of increasing this amount by 2 to 5 dollars a month and over time it will increase your efficiency even more.

Continue this pattern  until you have wiped out all of your debts and now you will have the ability to use the majority of your paychecks to plan for things like savings,retirement,and pretty much anything. The biggest reason that many are strapped is that they are using credit to it maximum, this is diluting your money every month. Changing how you pay back your current debt now will make a great difference on how long you stay in debt, how strong your credit will be and overall how much of the hard earned money you keep or give away.

This post was created by: http://www.debt-elimination-services.net

Credit card companies are very good at doing one thing , keeping you in debt for as long as possible. But if you know what to watch out for and how to get around them you will save yourselves a lot of money and get out of debt faster.

Trick#1 Offering for you to transfer a balance to your card , when you already have a higher interest rate balances currently on the card.  Why this is a big deal is because of the way the credit card companies handle payments. Now when you make a payment it pays off the lower interest balance first before the ones with higher interest rates. Now the only one that that benefits is the credit card, as they will continue to collect higher rates on the original balance until the lower rate balance is gone .

How would you get around this issue, only transfer a balance to a card with no balance or one that you can transfer the entire balance to and this issue will be avoided all together. Not that transfering for a better rate is a bad thing but if you do it improperly you will actually end up spending more in the end.

Trick#2 The funny thing is my credit card just tried this on me, they sent me a deal to make certain debts split off on the card to pay on those first until they are paid off, sounds good right.? Well again in hind sight it does the same thing as trick #1 . It takes you focus away from your actual balance and allows them to sock you with lots of interest on everything else.

Trick#3 This is not actually a trick as it is a greedy measure to ensure they stay profitable. Never ever ever make your payment even a day late. they will sock you with the most interest that they can legally causing you to not be able to make an efficient payment. There are ways to limit the amount of interest you pay on your credit cards, this is the practice I show all my clients to allow them to save money regardless of interest rates.

Trick# 4 Credit card companies will periodically offer you the ability to go a month without making a payment , do not fall for this technique and please make sure to go ahead and make your payment. This gives them another 30 days of interest on your full amount owed..  so bottom line don’t do it.

These are very common things credit cards will do to keep you in debt for as long as possible, but you can fight back by planning things correctly. Planning a proper debt elimination , debt consolidation, debt reduction plan will go a long way in reducing your debt fast and increasing your credit.

This post was brought to you by http://www.debt-elimination-services.net -updated

THe aged old question .. Why cant I get a loan and why is my credit score so low! .

In today’s economy it will be very important for you to maintain a good credit score. Even if you do not plan on using it any time soon you will need it eventually. The cleaner you keep your credit the easier it will be to get financing when needed. Trying to correct an issue with your credit at the last minute will not benefit you as much as keeping your credit strong. Lets discuss how it we can go about getting this done and hopefully you can apply this to your situation.

We are going to use the example of someone that has a credit score of lets say 650, this is not terrible but it does need work to be able to obtain decent rates. Increasing this rate may even be able to help him with his current debts like credit cards , with better rates they can attempt to obtain lower rates.  There are a number of factors that go into your credit score and to raise it you will need to abide by these rules to correct your credit score.

So lets say for instance you have 4 credit accounts, a car payment, a first and second mortgage .

First Card is a Limit of 6000.00 and a balance of 5000.00 with a minimum payment 170.00 a month. Your second card is a limit of 4000.00 and a balance of 2300.00 with a minimum payment of 65.00 a month. The third card that you have is one with a limit of 4000.00 and a balance of 3000.00 with a minimum payment of 122.00 a month . Finally the last card has a limit of  3000.00 and a balance of 1500.00 with a minimum payment of 35.00 a month. Now considering thes amounts there are some very pertinent issues that we should be addressing but which order would we do them in and how and why.

Here is the first rule of thumb that you should be aware of and start focusing on currently , no balance on any credit account  should be more than 40% of your credit limit. So for 6000.00 your maximum balance should be 2400, 4000.00 should be 1600.00 and 3000.00 should be 1200.00. this will directly impact your credit scores both positive and negative so the question is how will address this and which order will you take to fix it.

Glad you had asked and I will gladly supply you my input to making your credit score improve. I always start at the lowest balance and I do this for reasons which I will explain . How you handle your debt will be directly reflected in your credit scores(Remember this statement always). I start with the lowest balance because we will be attempting to accelerate the payoff of this account , the more extra principal we will be applying will take a bigger bite out of a smaller balance and obtain our goals faster.  So as in our example our lowest balance we need to eliminate 300.00 dollars to get it to the 40% ratio on that account . ow even once we get there we are going to want to continue forward momentum on that and all accounts, but only pay minimum amounts on all accounts ut the one we are concentrating on reducing. Once we repeat this process on each credit account and get them at 40% we will shift gears and blow all the rest of the debt out in order. So your first goal that you need to work on is reducing your balances below 40% and then continue on with these additional steps.

Now even though 40% is your primary goal , it is sooooooooooooooooo important for you to pay your bills on time . Make sure you pay your bills so they will post at least a week early , and if you are going to be making extra payments on the account you are focusing on above the minimum make them when you have them. What I mean is do not wait until your regular scheduled payment , this is very important because every time you reduce your balance you are also reducing the amount you pay interest on for that month. So if you reduce it by 10.00 in the first week then you pay 3 weeks of less interest that the ten dollars makes up in dollars.  ow this techniques will give you an extra principal boost at the end of the month over paying it with your regular payment.

Following these steps will help you raise your credit scores and best off all help you get out of debt. Be persistent and consistent with your payments and will have remarkeable results.

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What is it that stops most people from successfully executing a debt elimination plan. There are two big reasons that stop this process , one being lack of planning and lack of money. This post is going to discuss how it is that you probably already have the money you need to fix this issue but are probably using inefficiently and with a little help can be put right back on track.

The first item on our topic of this discussion and any and all discussions about this topic is a household bugget. Do you have a budget, meaning do you know where every dime you spend goes.? If you do not have a budget get cracking on this immediately as it will help you solve all your money issues quickly. If your budget shows you have an extra 50- 100 dollars available then you have your starting point , on the other hand you may determine that you run negative every month and should be considering some cut backs. We will discuss what to do with the surplus or negativity issues later in this post, but for now here are some other suggestions.

The first thing and probably the easiest thing you can do is look at reducing your expenses at the grocery store, sounds easy right. Handle you grocery shopping a lot you did with your budget, break down what you are spending monthly or weekly if you wish to do so. Make sure not to exclude all the extras like purchasing sodas, lunches, dinners out, once you have this information you take a good hard look to see if there is any fat to be trimmed immediately. Lets say you can trim 25 - 50 dollars right off the bat , this will again boost your efforts for eliminating and later in the post we will discuss how toy apply the money in an efficient manner. You should also start looking for deals with coupons, you have the local paper and some online resources like http://www.coupon.comto work with every time you go shopping. Now having said this it is very important that you change you mind set from using coupons to buy more to using the coupons to buy the same amount for less. Don’t get caught in this trap as it will take your advantage right out from under you.

The next item which is over looked quite often is the services you use on a daily basis , like insurance, cable, phone , utilities, etc.. Check with your car insurance company and go over your policy and see if there any trimming room without putting you at risk, again our goal here is to reduce tiny amounts across all your accounts and in the end we will build up an immediate increase in your debt elimination planning. Also look at the payment options they have , mine for instance has a 10% savings if I pay a certain way. While this isn’t going to make or break the bank it is going to play into your debt elimination goals.

How about your cable bill… Do you really need three HBO, Cinemax, Showtime for the tune of an extra 25- 50 dollars and we wont even go into the cost of HD. Lets get back to reality here as most of the movies played on the channels are also available for 8 dollars a month using netflix. Do you rally need 10 megs of download on high speed, almost 90% of the population will never even notice the difference and you are probably going to save around 20 dollars right off the bat with this options reduce. Enough said on that as most people are either stuck on the extras services or are willing to reduce where needed , I will leave that determination on your shoulders.

Lets discuss your utility bills, most cable company’s have a service where they install a device at your house that monitors and shuts down your services for brief moments during the day. I have this service and it saves me about 11 dollars a month and again a little per account will go along way in obtaining your goals.As far as your utilities are concerned you should also consider some other options, like making sure your hot water heater isn’t set to high. Setting he temperature properly can save you money, I for instance turn the hot water heater off when it is not in use and this make a dent in my utility bill. How about buy a round of the efficient light bulbs and as your bulbs die, replace them with more efficient ones. When you leave the house make sure to set you thermostat on the air conditioner to at least 80 , you are not home so why waste the money. Have all your equipment on surge protectors so that you can turn devices off when they are not in use, like over night.

Now that I believe I have gotten you on the path to increase the money you have available to tackle your debt, let discuss how we are going to use it for maximum benefit. If you are paying bills like most people then you are DOING IT WRONG, sorry for the bluntness, but I am convinced I can show you a better more efficient method that will change your financial future. This is actually simple and will only need one line to explain. Take any of the additional money that you have freed up and apply it to the bill with the lowest balance, make sure and apply it after your statement has posted for that month. Why you ask quite simple , applying in this way allows to reduce your principle balance by that amount for approx 24-28 days , this will result in a lower interest charge for the month and more of a principal payment. Doing this consistently will bring your interest and minimum payments down quicker then ever before. Even when this happens NEVER reduce yuor payment on this account only increase as available, once that card is gone you will now have an automatic reduction to the next card and so on and so on.

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With all the financial problems in today’s society it is easy to attempt to reach for solutions. Sometimes the solution you find looks like the answers to all your problems to your debt issues, but in the end does not provide the desired effect.

Everyone has seen or possibly gotten advertisements to consolidate your debts into new loans. While the terms always look better on paper, does it actually provide you a better deal long term.? The usual situation is for you to take several different loans and wrap them up into a single loan with a reduced payment. Now who wouldn’t jump at an offer like this.? better payment so obviously it is a better deal for you right.?… WRONG ! . There are many things you should be considering before you jump into debt consolidation, please do not get me wrong as I believe this will greatly benefit you if it is done correctly. I will discuss a few of the obvious things and offer some possibilities .

Lets say you have 3 cards with the following balances and rates:

Visa Card with 7500 (Minimum = 180) balance with an interest rate of 14% , discover card with 2000 (Minimum= 75)balance with an interest rate of 10,4%, and a master Card with a balance of 1200 (Maximum = 25) with an interest rate of 16%. You have a total of 1700 and are offered a flat interest rate of 9% with a minimum payment of 220 , while this is a decrease in your minimum is this actually a smart move long term.? If you plan on making the minimum payment as it is offered to you then it will not benefit you long term, so how could it benefit you !

The reason that it will not benefit you is your are starting a new loan at full interest and will pay more . Now lets say you get the better rate and still plan on paying your original payment , applying this amount of extra principal will now make sense . The reason you should be very sure you are going to be able to accelerate your payments before consolidating debt. If you do not do this you be right back in debt if not more than you originally started with before consolidating.

Now here is spin on this to think about before you consolidate your debts, get organized and prepare a proper budget and have your ducks in a row. Start analyzing your debts lowest to highest and determine how much money you have available to pay every month. Start with your lowest amount as it will go the fastest and apply everything you have available on this debt, everything else gets the minimum. Now that you have set the tone go ahead and look into debt consolidation loans. Once you have the debt consolidation loan pay the minimum by the third week of the billing period, and all additional funds the week after your next month posts.

Why would you want to pay that way you ask…   Thanks for asking …

When you pay your minimum at the end of the month you are essentially paying 30 days of interest on the full amount of the loan , by paying any additional within the first week you are reducing your balance by that amount thus reducing that amount of interest you will pay for that month. If you do this each month you will start to see a rapid reduction in your principal and the interest you pay.

So in conclusion to this article if you are consolidating and plan on paying the reduced amount DONT WASTE YOUR TIME as it will not provide you the full benefit.  If you need to reduce your expenses to make ends meet start with what you have first and if you need assistance contact a good financial consultant who can assist , Feel free to contact me if you don’t have one available and I would be happy to help.

Now if you are doing to be able to make a bigger payment I would say go for it as you will be making a dent in your debt and it will have made the most benefit.

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If you wanted to eliminate your debt , what recipe would you follow. A recipe for success includes using the right ingridients and following a properly laid out plan.

The first step for eliminating your debt is to build a solid foundation, this would include the most basic thing of creating a budget. The reason this is so important is every decision that you make has to be decided around how much money you have available . Not having a monthly budget is one of the biggest reasons that people get into trouble in the first place, it is very easy to over spend if you don’t how much money you have available. Creating and maintaining a budget is not the funnest thing in the world to do but will take all the guess work out of your life, so sit down and get to it asap.

Now that you have your base for your debt elimination recipe it is time to start planning out what plan of attack is going to make the most impact . Lets for a second consider some possibilities based around results from your budget numbers, both where you have extra money and where you don’t.

Example one: For the first example lets say you are managing your bills and your budget shows you are actually going in the negative by about 40 dollars every month, covering the extra costs with your savings. The first red flag is that you are using money designated for savings so that will slow any possibilities of this money growing. You will also find that you are making the bear minimums on payments and you will never to get ahead of your debt and the interest costs will be outrageous.

Example two: On the second example we have determined that above and beyond your bills that you have a 50.00 surplus. This is an awesome thing, but what should you do with it.? Put it in the bank would certainly be an option , however when you add up the amount of interest you make you will find that it isn’t worth it. Lets now consider what would make more sense for you to do with the extra income. Currently you have 7 things you are trying to pay off, but obviously we are going to concentrate on one at a time for maximum efficiency. For demonstration purposes lets say we are working on a credit card with a 5000.00 balance and our current monthly payment is 180.00 and out of that payment our interest charge is 100.00 so our actual principle reduction is only 80.00 . This is not very efficient and you are giving away more than half of what you are paying, now this is purely an example and may not be accurate based on your numbers but you will get the idea. In further diagnosing this example consider the following, to pay 5000.00 currently it will take approx 5.2 years to pay off. To help you out here is the formula you can use to determine this information, 5000 Divided by 80 Divided by 12 . These are raw numbers but will be accurate enough, now lets consider how the 50 dollars will fit into the plan.  You were currently paying off 80 per month now add the 50 for a tatal monthly reduction of 130 per month , this will decrease how long it takes to pay off to 3.2 years. Awesome starting numbers I would say, but it gets better each month as the increase in principal payments will decrease the  interest every month so re-run your formulas for updated numbers.

These are the 2 most common scenarios you will run into and once you know where you stand then you can take action and you can implement your recipe for a successful debt elimination.

This post was created by http://www.debt-elimination-services.net

Debt Elimination is a very obtainable goal if you understand some key concepts, I will be discussing one key piece here today. In our previous post we discussed the importance of having a proper household budget created , if this hasn’t been done please review my previous post on budget creation .

Now we will consider how knowing our budget comes into play in obtaining our goal of debt elimination. I have a task I would like you to complete before reading on as it will help you fully understand why it is so important for you to consider eliminating your debt.

1. Take a handful of your Credit Card bills, Car statements and review them carefully. Interest rate is certainly important but we are not concentrating on this at this time, you will hopefully understand why in a few.

2. Take the payment you made and subtract the interest charge giving you your actual principal reduction off of your balance. What you are going to see is a huge number difference, credit card companies have this formula down pat and this is by design. Now for the part that should motivate you, take the interest charge and multiply it by 10. This is the amount of money you are giving away in 10 months, in most cases this figure is staggering especially considering you probably have several interest accounts doing this same thing. This is the sole reason most people cannot get out of debt.

Now that you have completed this homework assignment , lets now consider what we are going to do about it. If you have not realized by now you are not making efficient payments and until you correct this your debt issues will never improve.  Now is the time for us to get to work in correcting this so that you can breathe easy and stop giving away your retirement money, you have accumulated this debt and must morally pay it off. But it doesn’t need to cost you your retirement , even though your credit card, car , mortgage companies will gladly take it from you. I will now lay out the most powerful things you change today that will change your financial future.

1. Identify all your interest accounts from lowest balance to highest, we do this for a reason as I will explain as I go along.  Remember as I statetd before you are not making efficient payments, I am fairly confident in this even without seeing your numbers. In order start making efficient payments we need to start attacking the piece that is causing you to stay in debt, we will use a systematic approach to wipe out all your debts. So how exactly will we accomplish the goal of complete debt elimination, we will use a combanation of techniques that will all the same common goals. Follow the process we show you and you will systematically break the interest cycle on your accounts , this will allow you to make more efficient payments . You will pay less in interst and more towards principal every month which will drastically reduce the time you stay in debt . The goal will be to continue to pay the same total amount on all your debts in total but will shift the dollars around to make the payments with the lowest balance more efficient. Let me briefly explain why we are concentrating on the lowest balance, understanding that we will not pay any less for out total debt . Heres an example to help you understand how this will impact your end goal .

Example: You are paying 2000.00 a month total , 1100.00 for your mortgage, 250 for your car, 275.00 for credit card one, 175.00 for credit card 2 , 120.00 for your department store card, 80.00 for your Best Buy card. You are strugglimg to get put of debt but can never seem to make a dent before the next emergency arises. This is actually how the credit system has been  designed and for one reason, keeping you in debt for as long as possible . Now lets flip the coin here and show you how to break the interest cycle  on your credit cards and how this will benifit you.

Proposed solution: You will always pay the minumum on all cards except for the lowest balance card, so as the minimums are lowered on any cards lower your payment on that card and increase the payment on the lowest balance card. Why is this important ! making an 80.00 payment on a card that charges interest will be like throwing money away … can you imagine how bad the numbers will look on debts with higher balances. Here is how we will accelerate your payments going forward , follow these steps and you will start seeing results within the first month .

1. To start the process you will need an additional 80.00, even if you have to save a while it will be worth it. You will make your normal scheduled payment at the end of the month, then start making regular weekly payments to your card with the additional 80.00 (20.00 per payment ) that you have saved up. Here is what will happen, each payment that you make will reduce your principal balance and thus the interest charges will be reduced immediatly. You will first notice that your interest charges will go down faster then ever before and then your minimum will start to follow, howver do not lower your payment . If you lower your payment you are playing with their deck of cards, it is time for you to deal your own hands.

So the instant effect will be that you will be increasing your principal payment on the card with the lowest balance. Lets now add the second effect as discussed breifly which I will now go in deeper details. In this example we have 3 cards that will adjust their minumums based on balance, typically you will see a drop of about a dollar a month. So lets go with this information for the moment and assume this is correct, this will give you 3 additional dollars to add the lowest balance card . Now doing some simple math this will have increased your minumum by 30 dollars, you will now be making a much more efficient payment and the balance will decrease faster and faster till gone. Obviously adding to the amount you pay will increase the efficiency and allow to start tackling the other cards faster. Each balance you eliminate will give you more efficiency as you will be adding the previous payment to the current minimum (paying weekly - divide paymetn into 4 equal payments) . It is not efficient to try and tackle all your cards at the same time, you will not have the money to do so and it will not achieve your goal as fast.  Yes you will probably succeed in lowering your minimums but will not systematically liquidate your debts fast .

The information in this posting may seem a little confusing at first but trust me once you get it wou will be on your way towards total debt freedom. My company helps our clients accomplish this task on a regular basis so feel free to contact us if you need help planning your debt elimination plan.

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