Will Minimum Payments Help You Eliminate Your Credit Card Debt?

True or False: If you pay the minimum amount due on your credit cards each month and never use them again, you’ll eventually pay off your balance.

While this statement might seem true, it’s false. The minimum payment is simply the interest amount due on your principal. If you keep on making the minimum payment, you’ll only continue paying the interest on your credit cards. You must pay more to than your monthly minimum to eliminate your balance.

Why a Savings Account Can Increase Your Debt

Another common misconception is that it’s always better to save money, even when you have debt. However, take a look at the interest you’re earning on your savings and compare it with what you’re paying on your credit cards. It’s likely you’re paying far more interest on your credit cards than what you’re making with your savings account.

If you have money to save, start applying it toward your credit card debt. You can then fall back on your credit card(s) in emergency situations.

Learn about a free five-step debt management plan for eliminating your debt and bad credit fast.

The Simplest Way to Stretch Your Income

The easiest method for making your money go further is to determine your wants versus your needs. For example, while you need to eat, you may want to have your meals at a restaurant. When you spend more on your wants than your needs, your debt will increase.

Wants also affect your car and home. If either one of these purchases take up too much of your monthly budget, it may be time to downsize. Also, be sure to look at your insurance coverage on your car and home. A little comparison shopping could help you lower your payments and, ultimately, stretch your income.

Contact us today for more ideas on how you can stop spending and pay off your credit card debt.