A new year means new hope of making your budget goals stick and a chance to turn around debt that may have snuck up on you over the past 12 months. Most well-meaning consumers need more than just good will, however. These proven methods of tackling credit cards and personal loans can get your net worth headed in the right direction.
Be Diligent: If your budget is tight and the thought of paying anything more than the minimum monthly payment is a foreign one, it may not seem worth the extra effort to look at paying down debt early. With just an additional payment of $5 a month, however, it's possible to see your debt goals as achievable again. Since the latest in credit card legislation (more specifically, the CARD Act), consumers now have more access to information on how paying the minimum (or more) will affect overall interest paid. Use this knowledge to your advantage, and play around with the numbers until you see a formula that makes sense. You'll also find that even small payments will be applied to those purchases with the highest interest rate first (as compared to pre-act practices of applying it to the lowest rates.) That $10 you threw away on a movie ticket last month may be better spent on knocking out that high-rate card a year earlier than planned.
A new year means new hope of making your budget goals stick and a chance to turn around debt that may have snuck up on you over the past 12 months. Most well-meaning consumers need more than just good will, however. These proven methods of tackling credit cards and personal loans can get your net worth headed in the right direction.
Be Diligent: If your budget is tight and the thought of paying anything more than the minimum monthly payment is a foreign one, it may not seem worth the extra effort to look at paying down debt early. With just an additional payment of $5 a month, however, it's possible to see your debt goals as achievable again. Since the latest in credit card legislation (more specifically, the CARD Act), consumers now have more access to information on how paying the minimum (or more) will affect overall interest paid. Use this knowledge to your advantage, and play around with the numbers until you see a formula that makes sense. You'll also find that even small payments will be applied to those purchases with the highest interest rate first (as compared to pre-act practices of applying it to the lowest rates.) That $10 you threw away on a movie ticket last month may be better spent on knocking out that high-rate card a year earlier than planned.