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Tips to get debt free and repair your credit
By Adam | May 22, 2007
How to get debt free and repair your credit
Keep just one major credit card with a low interest rate. You can use this card for reserving a rental car or a hotel room when you travel, Hankins said.You can also use it in a pinch when financial emergencies come up, she added.But try to pay off your credit card each month. One caveat: If you close out a bunch of credit cards at once, you run the risk of lowering your credit score, experts say.
The amount of available credit you have is an important factor in determining your credit score, McBride explained.
But if open credit cards are a temptation, go ahead and close them, he added.
“The fire you’re fighting is your debt,” McBride said.
Prioritize your debt and make a strategic plan to pay it off.Figure out how much extra you can pay on your credit cards each month and apply that to the one with the highest interest rate, while continuing to make the minimum payments on your other cards.Once that card is paid off, tackle the card with the second-highest interest rate and so on. Call each of your credit-card companies and see whether you can negotiate a lower rate, said El Paso certified public accountant Kym Anderson with Jones & Co.”It never hurts to call,” she said. “The worst thing that can happen is they say no.”If they shoot you down, don’t give up, McBride said. Shop around for a lower-rate card, he said. “Just beware of balance transfer fees that could erode much of your savings,” McBride said.
Track your expenses to find areas you can trim. Use that knowledge to create a budget.”You can’t cut your spending until you know how much you’re spending,” Sullivan said.Apply any resulting savings to paying off your debt, experts say. You might also consider getting a second job or having a garage sale to sell unwanted belongings. Take the extra cash, and use it toward whittling down your debts, experts say.
“Sacrifice is necessary,” McBride said.
| Average family owes $9200 in credit-card debtEl Paso Times, TX - 23 hours ago
One caveat: If you close out a bunch of credit cards at once, you run the risk of lowering your credit score, experts say. … |
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