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A Credit Card Debt Survivor's Easy-to-Get Tips
Financial gurus say only people with low self-esteem make credit card faux pas - But I was a confident person, though not an expert, and was in control of my finances. I made all the regular payments on insurance and mortgages. Took out insurance for the family and myself and also lived a reasonably good life with a holiday every year.
Life was great till I saw how much my credit card debts were... I decided to take a good long look at my spending and repaying and let me tell you it wasn’t easy understanding and accepting the mistakes I made. Down the financial memory lane I was astounded at my bloopers. But with some good commonsense I managed to snuff out this sparking dynamite of a problem.
After some research I realized that paying the minimum balance on my credit card did nothing to my principal debt. So I learnt the ugly truth that the 2% or the now 4% minimum monthly payment mainly went only to the interest and only the rest to the principal. That means that I would never actually pay up the principal. Like my holiday bills will never be paid if I continue to make the minimum payment alone.
The thought of paying off the credit card companies for the next thirty years was scary. So I did what most people did in 2005 – refinanced my home with a cash-out option. With the extra cash paid off my credit cards with the highest debts one by one and kept up minimum payments on the one credit card with least interest and best features. You can imagine the pure pleasure in cutting up those paid up cards.
Today, my home maybe the collateral but I don’t default on the payments and whenever I buy on credit I make sure to pay back as much as possible of the purchase possible. So are you facing mounting credit card debts like I once did? The key is to aim to make the maximum monthly payments on your credit card purchases and to remember to chuck the high interest cards.
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