Finance Choices
Help offered to pay off credit card cards
People struggling to pay off credit card debts have been offered a helping hand, in the form of a new plan designed to see them pay less, and clear their debts faster.
The new system is based on the simple and sound advice of paying off the most expensive debts first - something that seems obvious, but can be hard to calculate.
Now Myvesta UK, a not-for-profit money management organisation, has released an online credit card 'Optimizer' designed to take the worry and the hassle away from cardholders.
Steve Rhode, chairman of Myvesta UK, explained the principals behind the scheme.
"The first thing anyone needs to do when developing a plan to pay off credit card debt is to track their spending for at least one month to find out where their money is going," he said.
"After determining how much money there is each month to send to creditors, send the largest payment to the credit card with the highest interest rate and pay the monthly minimums on the rest. After the highest rate card is paid off, move those funds to the next highest card. Continue to do this until all the cards are paid off."
Another simple trick, when trying to reduce payments, is to transfer as much money as possible from the credit card (or overdraft) charging the most interest to the card charging the least interest. Once the most expensive card is paid off, this can be repeated ? ensuring cards are paid off as fast as possible with the least interest accrued.
And in many cases, when debts seem to be spiralling out of control, cardholders have more ability to pay off their debts than they realise.
"Quite often it's a problem of organisation, motivation and time," Myvesta's Mr Rhode explained.
"People simply don't have the necessary skills or are too busy to effectively put together and maintain a payment plan on their own. That's where our AllPaid program steps in. We take over the responsibility of handling the bills and are able to reduce debt faster than people can do on their own."
The new system is based on the simple and sound advice of paying off the most expensive debts first - something that seems obvious, but can be hard to calculate.
Now Myvesta UK, a not-for-profit money management organisation, has released an online credit card 'Optimizer' designed to take the worry and the hassle away from cardholders.
Steve Rhode, chairman of Myvesta UK, explained the principals behind the scheme.
"The first thing anyone needs to do when developing a plan to pay off credit card debt is to track their spending for at least one month to find out where their money is going," he said.
"After determining how much money there is each month to send to creditors, send the largest payment to the credit card with the highest interest rate and pay the monthly minimums on the rest. After the highest rate card is paid off, move those funds to the next highest card. Continue to do this until all the cards are paid off."
Another simple trick, when trying to reduce payments, is to transfer as much money as possible from the credit card (or overdraft) charging the most interest to the card charging the least interest. Once the most expensive card is paid off, this can be repeated ? ensuring cards are paid off as fast as possible with the least interest accrued.
And in many cases, when debts seem to be spiralling out of control, cardholders have more ability to pay off their debts than they realise.
"Quite often it's a problem of organisation, motivation and time," Myvesta's Mr Rhode explained.
"People simply don't have the necessary skills or are too busy to effectively put together and maintain a payment plan on their own. That's where our AllPaid program steps in. We take over the responsibility of handling the bills and are able to reduce debt faster than people can do on their own."
posted by Bruce Wayne at 8:06 PM
Help offered to pay off credit card cards
2 Comments:
When we finally realized we had a problem with debt, 3 years ago, we had 4 credit cards, a car loan and a school loan. Now we just have 1 credit card and the school loan. We got some good advice from a Crown financial advisor. Pay the debt with the least amount on it first then, when you have that payed off, put whatever amount you were giving to that debt to the next one(sometimes you have to factor in the interest rate too). And NEVER keep charging on the credit cards-RIP THEM UP. And dont apply for new ones.
Now with just one very low income we are having trouble again keeping up but we went to a debt consolidation company CCCS (recommended by crown financial) to pay off credit card. We still have a ways to go but I do see a small light at the end of the tunnel.
Praise be to God for the debt we got rid of!
I think the key to getting out of debt is to budget wisely and STICK to that budget. Include everything, from what you pay to the cards and other debt, to how much a month you spend on gas and groceries.
We live on one income only, and a military income on top of that. Needless to say we don't have money coming out of our ears, but we aren't drowning in debt either. Granted we HAVE debt. but it's managable and we're paying it down, slowly, but surely.
I made my own budget, I was sure to include things that were just strickly fun, for instance money for my Husband to golf on the weekends, trips to museums, etc. I also sit down each week and make a list of what I'm going to be cooking. It's a lot cheaper to cook your meals then to grab fast food and dinner out all the time. I will make enough for a family of 6 (even though we only have 3 people eating-one infant only on breastmilk) and freeze the rest or put it in the fridge for a day or two down the road.
When we get extra money, for instance our tax return, Birthday money, etc. we apply that to our debt. I like to pay the cards off with the lowest balance first because I feel better at having accomplished something. I don't tear the card up though, nor do I cancel it because that will affect your credit rating-I'll explain that in a minute. I just file the card away to use strickly for emergencies (I live on the opposite coast from my family and if something were to happen, I would gladly go back in debt in order to get there). Now about cancelling your cards once you pay them off...there was an article I read somewhere that discussed how cancelling them as you pay them off effects your credit score in a bad way. Credit companies look at how many cards you have vs. the amount you have on them. If you are maxed out and you pay off a card and then cancel it, well then you're still maxed out on credit. If you pay it off and then leave it alone, well you have that little bit of open credit. Plus it shows that you CAN manage your credit if you don't allow yourself to live outside your means.
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