About a year ago while I was on the injured list I suddenly became 40% poorer due to a cut in pay that happens when you go on disability. Even if you don't want to hear this I am going to say it every time this is mentioned. Nobody paid my mortgage and I still didn't use the bishops storehouse. Just saying. Now moving on. I had alot of time on my hand to think and I tried to figure out how to reduce debt or at least reduce interest. I realized your credit card can cary a balance and upwards towards 2 months can be interest free before accruing interest. For 1 month I tried using credit cards and paying them off. I had no interest the 2nd month then lost track of my expenses and ended up leaving the credit card balance on the card. I then slowly started paying it down. The credit card won and I didn't. Now I realize my mistake and I will show you that it is possible to destroy your credit card by using it.
First learn how credit cards work. Credit cards have an opening and closing date. Usually exactly 1 month. For example if your credit cards opening date is the 9th your closing date will be the next month on the 8th. You usually have a grace period of around 20-25 days. So your due date will be around the 4th or 5th. So if you put 300 dollars on your credit card that once had a zero balance on the 9th of September you have until November 4th to pay it off before you start accruing interest. This is very important to remember.
1st find out what your opening and closing date.
2 pick a payment amount you know you can stick to. Mine is 25.00
3rd find all of your bills that can be put on a credit card.
Now let's begin. Remember for the first month you are going to accrue interest. It's the following month and then after your not. Your basically going to pay your credit card backwards. Instead of paying a payment towards your credit card where your charged more than half in interest you are going to pay off your credit card with the money you would of paid for your groceries bills gas ect. Towards your credit card first then pay your bills up to 25 dollars less or whatever your payment is on your credit card. Your paying the old balance in full every month putting a new balance on then repeating every month until you have a zero balance. Your credit card is paid faster because you eliminate interest. Credit rating goes up?
and you get of debt creating more stability and income for your family.
A couple of pointers
1st a credit card can have multiple payments. If you have a bill coming up that can be put on a credit card pay the bill with the credit card then pay your credit card. Check with your cc company to see how many times you can make a payment.
2nd You must eliminate all old debt on the card for this to work. If your making payments make sure you pay your entire statement balance by your due date. For example if you owe 500 dollars but only can put 300 towards it do that but make sure before the due date another 200 goes on it or it will not work.
3rd BUDGET BUDGET BUDGET! You will not get anywhere if you don't care. Chose the cheaper items drive your car slower to save gas pack your lunch. Just by changing simple things you can easily save the amount of your payment. For example I love soda. The place I go to charges soda at a 1.39 + 8 % sakes tax. I've decided to change and go to my grocery store which charges 49 cents + 4% tax for refills. In one month I can easily save 25 bucks just from that one decision.
4Th Write EVERYTHING down. This is seriously my most important rule. Get a piece of paper or a notebook and you write the date description and price of every item or bill you pay for than deduct that from your amount your allowed. I use a folded piece of paper in my wallet. For example you pay your credit card 600 dollars. Minus your payment of 25 dollars you are now allowed 575 dollars.
5th. Most often you use your credit card for about 2 weeks. As soon as your done put it away and don't use it until your within your credit card time frame. Usually it's 2-3 weeks prior to your due date.
6th Use credit cards that have incentives such as cash back or points. They will help you quicker by paying you to use them.
7th Last one for now. Combine and conquer. Combine your credit card debt into one credit card or pay off higher interest cards by combing them. Here's how that works. Say your done with one credit card for the month but want to eliminate another higher interest card. Well max out the one you are working on with bills or things you would have spent from your account then pay that amount towards that high interest credit card. When you pay it down again months later repeat until that other credit card is eliminated. Works best for department store cards where your eliminated on only one store you can shop at. Just remember to not go over what you can handle paying off on a monthly basis.
So try it. Use your credit cards to destroy them and again remember. Do this with extreme caution and a very watchful eye. It can easily get away from you with one simple mistake.
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