reducing CREDIT CARD DEBT

Step 1: Learn About Credit Card Debt

• Credit card debt is the fasted growing debt among American households. Understand these basic facts:

1. According to the American Bankruptcy Institute, nearly 85-90% of bankruptcy filings were due in part to excessive credit card debt.
   
   
2. Households receive on average 20 credit card offers per year.
   
   
3. Credit card companies make money when you become a "revolving" credit card holder — which means the holder maintains a balance from month-to-month.
   
   
4. Credit card companies make money when you pay only the minimum required amount — which minimum amount is interest plus a small percentage (around 0.5%) of the balance outstanding.
   
   
5. Credit card companies make money when you accept and then spend up to the credit limit offered.
   
   

With these facts in mind, the card company's business strategy is to get you to:

1. accept their card using pre-approval offers;
2. charge out the maximum credit limit awarded;
3. pay interest-only payments each month;
4. and maintain a credit balance from month-to-month.
   
   Now consider this:
   If you paid just the minimum payment on a $4,800 credit balance at the average annual rate of 17% plus 0.5% for principal reduction, it would take you over 21 years to pay off your balance (considering that you did not have any other charges).
   
   That means paying $13,376.35 in interest charges alone, for a total repayment of $18,176.35 for the privilege of charging $4,800!
   
   No wonder that credit cards are one of the lender's most profitable product lines.

Step 2: Add It All Up

Step 2a: Use the worksheet at right to list your current credit card debt. Also list the interest rate (APR) that is associated with that card. Include all credit cards; i.e., retail cards, gas cards and other revolving charge cards. Step 2b: Hit "Calculate" to total your credit card debt and the monthly interest rate charges. Note that the interest charge is an estimate based on your outstanding credit card debt and APR. Your actual interest rate charge may vary. "Calculate" will insert the total balance in the schedule payoff calculators under Step 3. Step 2c: If you paid the suggested minimum payment each month, it would take about 22 years before your debt will be paid off. Step 2d: Your objective is to reduce or eliminate this debt either by paying extra each month or by consolidating. Click to view payoff options

Credit Card Worksheet  Credit Card 1 $ %  Credit Card 2 $ %  Credit Card 3 $ %  Credit Card 4 $ %  Credit Card 5 $ %  Credit Card 6 $ %  Credit Card 7 $ %  Credit Card 8 $ %  Credit Card 9 $ %  Credit Card 10 $ %  Credit Card 11 $ %  Credit Card 12 $ % * Your total outstanding credit card debt: $ Your current monthly interest rate charges: $

Step 3: Schedule Your Payoff

• Use these calculators below to estimate your payoff schedule and amount.
  
  Use the "Monthly Payment" calculator
  to estimate the amount you need per month to payoff your debt over a given period of time (in months).
  
  — enter the best interest rate you can receive
  — enter the number of years you need to repay the debt
  — press "calculate" to estimate repayment amount
  
  Use the "Repayment Period" calculator
  to estimate the time it will take to payoff your debt with a budgeted fixed amount that you can pay each month.
  
  — enter the best interest rate that you can receive
  — enter the amount you would like to pay
  — press "calculate" to estimate payoff terms
  
  Download our "Debt Payoff" worksheet
  to run your numbers on your desktop: download worksheet
  
  
  

Monthly Payment Repayment Period Debt Balance: $ Debt Balance: $ Interest Rate: % Interest Rate:   % Repayment Term: months Monthly Payment: $ * * Monthly Payment: $ Repayment Period:   years months

Step 4: Pay It Off

• Analyze Your Pay Off Options:
  
  Option 1: payoff one card at a time
  Option 2: combine all balances under one card   |   find a card
  Option 3: consolidate your credit card debt   |   apply now
  Option 4: seek credit counseling help   |   get help
  
  
  Need Debt Relief now? We can help.
  Get free, 100% online debt relief.
  Click here for more info

Step 5: Manage It

• How you manage your credit cards
  is a key measurement that credit reporting agencies use when quantifying the credit rating of an applicant.
  
  Card holders who pay their card balances on time, at the required amount, will receive a favorable credit rating that translates into lower interest rates on mortgages and consumer loans.
  
  
  
• Card holders who are late in paying their credit cards payments,
  
  often not paying the required amount as due, will receive a less-than-favorable credit rating that translates into rejected applications or higher interest rates for mortgages and consumer loans.
  
  
  
• We have two credit card management programs for review:
  

  Program A: for card holders who control their credit card use and payoff credit card balances in full each month.
  
  Includes a FREE download on maximizing credit card rebates.

  Program B: for card holders who carry credit card debt and pay only the minimum balance each month.