Credit card debt trap – try to avoid now

I guest most of your debt had been occurred by using credit cards. One way they tried to cut into their debt was called “credit card hopping”. The thing you should do is looking for credit cards with lower interest payments than your current cards. Even your goal is find the interest rate below 10% but you should think in mind, did these savings really benefit? To illustrate, if you owed debt in $50,000 in credit card debt and charged 18% on interest, you will have amount of interest payment in next thirty year over $100,000. In the other way, shifting all their debt to credit cards charging only 10% interest, and continuing to making only the monthly payments the interest payment in the next thirty year is only $28,000

So consolidating the debt on lower interest credit cards is works. But I have some other way to reduce your credit card debt. Let’s take a look at all the ways to avoid credit card traps.

Making Only Minimum Payments-the great traps
When your bill arrives; you open it and point to the minimum amount due. Yes! I can pay it at minimum amount. But this is the biggest mistake you and make with credit cards. Minimum payments can extend your debt period and you have more cost in interest rate.

I will show that If you make and minimum payment what affect to your debt period. I start that you have a credit card debt balance of $7,000 on interest rate of 17%. How long do you think to eliminate all of debt if paying minimum of 2% each month? Four years? Seven years?

Don’t surprise if I tell you that almost 45 years to pay off the only $7,000 debt. And you would end up paying about $15,000 in interest on your principal of $7,000.

Max Out Monthly payment- pay as much as possible
If you possibly can, always pay your credit card bills most for avoid any interest payments in the future. In the example above, if you simply continue $1,400 payment per month, you would have debt period only seven years with $5,300 in interest. $5,300 or $15,000 in interest? It up to you.

If you doubt whether to use your bonus to pay off debt or invest in the stock market, you should try the Financenter.com site that can help you about tools for answer this question, ‘Should I pay off debt or invest in savings?”

Your Kids
Today, credit cards are a part of living, but is it right to allow your children to have them? I think credit card unnecessary for children and this is so risky to do that because children tend to spend by not thinking what they ‘want’ or ‘need’. How do you encourage your children to be responsible with credit in the process? One good way is to share your credit card bills, let them pay it themselves. Then they will learn about credit card more, the grace period, and the minimum payment requirements. Use calculators to highlight interest charges.

Check it up! On the internet
In recent year, the trend of money management is arisen, credit card surfing. I believe that you ever receive E-mail about a good credit card offer or lower rate in interest. Now it’s time for surfing!

If you can, try to consolidate all your credit-card debt onto one low-interest card. if have the benefit of savings in interest payments, you will have to make only one simple payment each month. If you can’t consolidate all of your credit card debts, you must payoff the highest interest first or consolidate your debts into the new card. You can order a debt eliminator report from Myvesta.org. It will show you, month-by-month, and the fastest way to get out of debt using the funds you have. Before consolidate debt to a new card, you should read all of the rules and regulations regarding balance transfers for your new card, and it might take time about three months to complete; and when you wait the process to be complete, reduce your highest interest rate credit card that the thing you should do.