Crushing Credit Card Debt

How much do YOU owe on your credit cards?The average American family is now over $7000 in debt juston their credit cards. That debt generates an interestcharge of over $105 each month if your card charges theaverage 18%. If you have missed a payment or made a latepayment (even by one day!), you may be paying up to 27%interest or over $157 each month.Most credit card companies require a modest payment towardsthe card balance. Modest meaning from $10 to $20 a month.To pay off a $7000 debt at $20 a month you will not pay offthis debt for 29 years.And what about those interest charges? Paying off a $7000credit card debt charging an interest rate of 18% and paying$20 a month towards the debt, you will pay over $18,400,more than TWICE the original debt, just in interest.What if you have more than one card? What if your debt isover $7000? What can you do? How can you get out of thishole?There are some techniques that can help you pay off yourdebt and do not require expensive loans, invasive creditchecks, or expensive financial planners and accountants.You can also save on interest charges by paying off yourdebts in a certain order.The most effective technique is sometimes called the"snowball" method. The snowball method suggests that whenyou pay off one debt you apply that payment amount to thenext debt. Thus the amount you pay on a debt grows like asnowball rolling down a hill.For example, you have three credit cards with debts of$5000, $4000, and $3000 which are charging you 18%, 27%, and12%, respectively, and you are paying $150, $125 and $100each month. By paying these required monthly amounts youwill pay off your $3000 credit card first.Now that the $3000 card is paid off you have an extra $100 amonth. Put that extra $100 toward paying off your nextcredit card debt. Now you are paying $225 a month on the$4000 card and the $150 on the $5000 card. With thisaccelerated payment on the $4000 card you will pay off thecard earlier and save some money on interest charges.Then apply the $225 payment to the $5000 card for a monthlypayment total of $375. Soon this card will be paid off andyou will have $375 extra each month to pay off other debtsor better yet, INVEST!So, which debts should get paid off first?Generally, you want to pay off the debts that are chargingyou the highest interest rates first. In the above exampleyou could have added the $100 payment to the $5000 creditcard rather than the $4000 credit card. But the $4000credit card is charging you 27% where the $5000 credit cardis charging 18%. By paying off the card charging the higherinterest rate first, you will save some money on interestcharges.If this sounds too confusing, you can enlist your computer.You can search the Internet for the keywords "debt reductioncalculator" or you can visit href="http://www.simplejoe.com/debteraser/index2.htm">http://www.simplejoe.com/debteraser/index2.htm and review aproduct named Simple Joe's Debt Eraser.Simple Joe's Debt Eraser helps you create a href="http://www.simplejoe.com/debteraser/index2.htm">RapidDebt Reduction Plan that is customized to your debts andyour situation. Just enter your debts and the amount youcan afford to pay each month. The software will create aplan telling you how much to pay towards each debt eachmonth until they are all paid off.You CAN pay off your debts. The trick is to stop chargingpurchases to your credit cards and develop a debt reductionplan. Your plan should include "snowballing" your paymentsand prioritizing the debts by high interest rate.