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Multiple Credit Card Applications Have Their Strong Negative Side
Nowadays it is getting more and more popular to have several credit cards. It is not just popular but in some cases even convenient. But having several credit cards does not only mean unlimited financial opportunities but also the whole bundle of obligations and rules to follow.
So, on the one hand you have the illusion that you possess desired financial freedom and flexibility. But on the other your credit debt is growing like a snowball and quite soon you will realize that you are not able to meet all your credit obligations.
In the past being in personal debt was considered at least unwise and almost immoral. The times are changing and nowadays if you do not have a credit card and thus credit history, you will hardly be able to use the benefits modern society can provide you with.
The attitude changed but the core of a subject remains the same. How to pay off the money you owe? If a person has several credit cards he or she can easily lose control over their finances, get confused and end up with huge debt. Due to annual fees and high interest rates the amount of your debt can grow like a snowball.
What can be done in this case? We can offer you an efficient method how to pay off revolving debt.
The basics are as follows:
- List all debts from the smallest balance to the largest. Interest rate is not considered.
- Agree to pay the minimum amount on every debt.
- Determine how much extra money you can pay in addition.
- Pay the minimum sum plus the extra amount towards that smallest debt until it is paid off.
- Then, start to pay the second smallest credit card debt.
- Repeat until all debts are repaid.
This method is very good from the psychological point of view because each time you will receive fewer bills to pay. This gives an impression that you are on your way to credit debt elimination. Let us see this simple example
Not taking into account interest rates, let us say you have the following debt:
- Car Payment - $3000 balance - $160/month minimum
- Credit Card X - $150 balance - $20/month minimum
- Loan - $6000 balance - $300/month minimum
- Credit Card Y - $400 balance - $22/month minimum
The minimum amount you need to pay every month is $502. According to this method you will arrange your debt in the following manner (from the lowest to the highest):
- Credit Card X - $150 balance - $20/month minimum
- Credit Card Y - $400 balance - $22/month minimum
- Car Payment - $3000 balance - $160/month minimum
- Loan - $6000 balance - $300/month minimum
For example you have $50 extra per month. That means you can add it to the Credit Card X monthly payment. That makes $70 per month. Other debts will receive the minimum amount.
After you have paid off Credit Card X, you start to pay off Credit Card Y adding to the minimum amount your extra $50 and $20 you were sending to Credit Card X. This will go on until all the debts are paid off.
But make sure to avoid temptation of any new credit card applications. Remember that numerous credit cards involve numerous credit debts. Keep your head cool, follow your path and this will absolutely change your lifestyle from this moment on.
Comments• News Comments... |
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I can't undersatnd what for people apply for several credit cards. They drive themselves into a difficult situation and a huge amount of problems.
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