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Further
Reading ...
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Home Office Stress Busters - BB Lee
According to a new survey carried out by Alliance & where ID_NUM=9270; Leicester, one in five small business owners view tax as their greatest concern. The Chancellor has announced in his last budget that companies with profits below œ10,000...
How To Evaluate A New Business Opportunity - Mufad
If you are searching for ways to earn an income using the internet, you must have already come across many programs with unbelievable claims of overnight income. This article outlines 7 criteria that I use to evaluate any opportunity that presents...
What Is The Single Worst Mistake Most People Make When Writing Classified Ads? - Kim Thomas
All sales begin with some form of advertising whether it’s word of mouth or printed media or even electronic. To build sales, this advertising must be seen or heard by potential buyers. It must cause them to also react to the advertising in a...
Simple Steps to Project a Professional Home-Business Image - David A James
One of the more difficult tasks to deal with when starting a home-based business is to decide how to establish your pathways of communication in such a way that you appear organized and professional, yet don’t have to break the bank to get...
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Crushing Credit Card Debt
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Written By:
David Berky
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How much do YOU owe on your credit cards?
The average American family is now over $7000 in debt just
on their credit cards. That debt generates an interest
charge of over $105 each month if your card charges the
average 18%. If you have missed a payment or made a late
payment (even by one day!), you may be paying up to 27%
interest or over $157 each month.
Most credit card companies require a modest payment towards
the card balance. Modest meaning from $10 to $20 a month.
To pay off a $7000 debt at $20 a month you will not pay off
this debt for 29 years.
And what about those interest charges? Paying off a $7000
credit card debt charging an interest rate of 18% and paying
$20 a month towards the debt, you will pay over $18,400,
more than TWICE the original debt, just in interest.
What if you have more than one card? What if your debt is
over $7000? What can you do? How can you get out of this
hole?
There are some techniques that can help you pay off your
debt and do not require expensive loans, invasive credit
checks, or expensive financial planners and accountants.
You can also save on interest charges by paying off your
debts in a certain order.
The most effective technique is sometimes called the
"snowball" method. The snowball method suggests that when
you pay off one debt you apply that payment amount to the
next debt. Thus the amount you pay on a debt grows like a
snowball rolling down a hill.
For example, you have three credit cards with debts of
$5000, $4000, and $3000 which are charging you 18%, 27%, and
12%, respectively, and you are paying $150, $125 and $100
each month. By paying these required monthly amounts you
will pay off your $3000 credit card first.
Now that the $3000 card is paid off you have an extra $100 a
month. Put that extra $100 toward paying off your next
credit card debt. Now you are paying $225 a month on the
$4000 card and the $150 on the $5000 card. With this
accelerated payment on the $4000 card you will pay off the
card earlier and save some money on interest charges.
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Then apply the $225 payment to the $5000 card for a monthly
payment total of $375. Soon this card will be paid off and
you will have $375 extra each month to pay off other debts
or better yet, INVEST!
So, which debts should get paid off first?
Generally, you want to pay off the debts that are charging
you the highest interest rates first. In the above example
you could have added the $100 payment to the $5000 credit
card rather than the $4000 credit card. But the $4000
credit card is charging you 27% where the $5000 credit card
is charging 18%. By paying off the card charging the higher
interest rate first, you will save some money on interest
charges.
If this sounds too confusing, you can enlist your computer.
You can search the Internet for the keywords "debt reduction
calculator" or you can visit href="http://www.simplejoe.com/debteraser/index2.htm">http:/
/www.simplejoe.com/debteraser/index2.htm and review a
product named Simple Joe's Debt Eraser.
Simple Joe's Debt Eraser helps you create a href="http://www.simplejoe.com/debteraser/index2.htm">Rapid
Debt Reduction Plan that is customized to your debts and
your situation. Just enter your debts and the amount you
can afford to pay each month. The software will create a
plan telling you how much to pay towards each debt each
month until they are all paid off.
You CAN pay off your debts. The trick is to stop charging
purchases to your credit cards and develop a debt reduction
plan. Your plan should include "snowballing" your payments
and prioritizing the debts by high interest rate.
About the Author
© Simple Joe, Inc.
David Berky is president of Simple Joe,
Inc. which sells the Simple Joe's Debt Eraser PC software.
Debt Eraser can help anyone get out of debt quickly and
inexpensively by creating a href="http://www.simplejoe.com/debteraser/index2.htm">Rapid
Debt Reduction Plan. This article may be freely
distributed as long as the copyright, author's information
and an active link (where possible) are included.
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The Difference Between Investing and Trading - Rob Hall
Investing and Trading are not the same thing. The returns you seek, the length of time it takes to achieve those returns, the amount of risk one is prepared to take, and the commitment one can make to monitor the investments dictate the strategy...
Personal Debt Reduction Practices - Gary Gresham
Personal debt reduction practices, the steps people take to relieve the debt in their lives and to become more financially free, are a hot topic among financial circles. American spending habits are producing more people who are deeper in debt...
Facts you should know about loan types - Prakash Menon
When you set out to borrow, you often come across terms like unsecured loans, revolving loans, adjustable rate loans, etc. While these terms are more or less self-explanatory, it is still useful to be clear on their exact meanings and what they...
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