Get Rid Of High Interest Credit Card Debt

Category: Finance, Credit.

The biggest budget killer of all time is the high interest credit card. Do you think that's bad?

It used to be it would take an average of 52 years to pay off a high interest credit card balance if you paid your minimum monthly payment! Well, it's gotten worse. Unbelievably, there are many credit card companies that charge 299% and even more on their customers' balances and, if that's not bad enough, they compound the interest daily. The average time it takes to pay off these credit card balances today by making the minimum monthly payment is: never! 299% compounded daily! With a 299% card you pay about 5% interest per month on your balance. I say the first month because if you don' t make your payment on time or if the minimum monthly payment due is less than$ 50, your total amount owed will increase the next month. So, if you owe$ 2, 000 on a card that is charging this excessive and unseemly rate, you would be paying$ 50 the first month just in interest!

Many credit card companies will set your minimum monthly payment at less, or about the same as the 5% interest you will be paying each month. However, if you would pay$ 700 a month, instead of$ 50 on this$ 2, 000 total, you will be paid in full in a little more than 4 years. If they do this, and you continue to pay the minimum, you can see how you will never pay off the total balance or even pay it down at all! Do you think these credit card companies want you to pay your balance in full? High interest credit card companies hold you hostage! You can bet they don' t! Why would a credit card company want you to pay your balance in full when they are charging an interest rate 5 times the prime rate?

It should be, but if you have a particularly strong stomach, read some of the other wonderful things these great credit card companies do. 1- If you are late, they hit you with a late charge, which is usually$ 300! Is all of this making you sick? Even if you' re total balance is$ 100! So, if you have a balance of only a few dollars, they will charge you a$ 10 fee anyway! 4- If you' re late with a payment, even though they love it because they get to rob you out of another$ 300, they' ll report you late to the credit bureaus so eventually they can ruin your credit rating altogether! In this case they would be realizing a return of 4000% on a yearly basis. 2- If you pay over the phone, they charge you$ 10 to$ 15 for about 2 minutes work. 3- Many of these scoundrels have a minimum finance charge. Nice guys!

I am 100% convinced it is impossible for anyone to get ahead financially while having high interest credit card balances. Why would a credit card company want to give me bad credit? These credit cards have destroyed the credit of millions and the companies are happier than pigs in mud that they do. So these horrible credit card companies can force you into taking their horrible deals! As long as they can keep your credit rating low, you will not qualify for good loans with reasonable terms. How do I start getting rid of high interest credit card debt?

Get rid of high interest credit card debt. If you want a shot at becoming financially successful there is one thing you must do. Cut up all your cards. Pay off all the balances on all the cards by paying a large amount toward one each month. Get a debit card and never charge anything on one of these cards again. Pay the one with the highest interest rate and when it's paid start on the one with the highest interest rate of those remaining. I know people who are paying$ 500 a month now and are not paying down their credit card debt at all because they are getting hit with late charges.

If you owe$ 10, 000, paying off$ 500 a month will have you paid off in a little more than 2 years. Refinance your mortgage to pay off high interest credit debt if you have to. If you don' t own a home or you can' t swing a refinance, go to a non- profit credit counseling service. It will be well worth it in the long run. They can get lower rates for you and set it up so you can make one payment a month to them. It's a sound financial move. Just make sure you go to a non- profit debt management organization and they will handle your debt situation without charging you more fees.

I can guarantee if you asked financial advisors, economists and/ or financially successful people, "what is the first step to becoming well off? " Every one of them will tell you, "Do whatever it takes to pay off your high interest rate debt. Period. " Exclamation point!