First of all, let me state here that I am a simple, everyday dude. I am a business owner and an accountant with a Bachelor’s degree. Managing your money does not take any special skills that you have to study for. Apart from my mortgage and student loans, I do not have any credit card or other debt. I was able to pay off all of my credit cards while I had 2 incomes (a 9-5 and my business http://www.inmate-connection.com/). If you are paying only the minimum payments on your credit card balances, you are wasting your time as you will never pay off those credit cards. Pay MORE than the minimum balance (as much more as you comfortably can). The whole idea is to eliminate that debt. The credit card companies are making a killing on you by charging you interest monthly. When you make that minimum payment, look at your credit card statement the following month; has it changed much? NO it hasn’t! Simply because the minimum payment that you made, had little effect on the interest that you are being charged. Especially if your interest rate is 14% or higher. Look at this example:
Your balance: $2,456.73
Subtract min. payment you made: $ 25.00
2,431.73
Interest 18% 437.71
New Balance 2,869.44
In this example, you can clearly see that your balance is increasing and the payment that you make is not reducing your balance. You have to pay more than the minimum balance in order to pay down this balance. You can also call the credit card company and get them to lower your interest rate. If possible, try to talk to a manager or supervisor and plead with them that you have been a faithful customer (since you opened the account) and that you have been making your payments on time. This will not work if you have a history of late and missed payments! Oh and by the way, DO NOT charge anything else on that credit card. In fact, you need to hide or throw away your credit cards and pay either cash or from your debit card. Even though I have many credit cards, I have stopped using them and I now get letters like this:
Re: Account ending in xxxx
HSBC Credit Card Account issued by HSBC Bank Nevada, N.A.
Dear xxxxx xxxxxxx:
Due to inactivity on your HSBC Credit Card this Account has been closed. We proactively close accounts that are inactive to protect our cardmembers from potential fraud and identity theft
As an additional security measure, please remember to destroy all credit cards and checks associated with this Account. If you would like to apply for a new account with HSBC, please call our Customer Service Department
1-800-379-7999.
We look forward to future opportunities to serve you.
Sincerely,
HSBC Credit Card
Credit Card Services
I just smile and throw them away knowing that I would rather keep my money in my pocket than pay high interest fees to them.
Your balance: $2,456.73
Subtract min. payment you made: $ 25.00
2,431.73
Interest 18% 437.71
New Balance 2,869.44
In this example, you can clearly see that your balance is increasing and the payment that you make is not reducing your balance. You have to pay more than the minimum balance in order to pay down this balance. You can also call the credit card company and get them to lower your interest rate. If possible, try to talk to a manager or supervisor and plead with them that you have been a faithful customer (since you opened the account) and that you have been making your payments on time. This will not work if you have a history of late and missed payments! Oh and by the way, DO NOT charge anything else on that credit card. In fact, you need to hide or throw away your credit cards and pay either cash or from your debit card. Even though I have many credit cards, I have stopped using them and I now get letters like this:
Re: Account ending in xxxx
HSBC Credit Card Account issued by HSBC Bank Nevada, N.A.
Dear xxxxx xxxxxxx:
Due to inactivity on your HSBC Credit Card this Account has been closed. We proactively close accounts that are inactive to protect our cardmembers from potential fraud and identity theft
As an additional security measure, please remember to destroy all credit cards and checks associated with this Account. If you would like to apply for a new account with HSBC, please call our Customer Service Department
1-800-379-7999.
We look forward to future opportunities to serve you.
Sincerely,
HSBC Credit Card
Credit Card Services
I just smile and throw them away knowing that I would rather keep my money in my pocket than pay high interest fees to them.
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