Once the card is paid out, aim for another balance and so on until you clear your debts. When paying off your credit cards, be sure to monitor them closely, as even unfunded credit card accounts may incur annual fees and other charges. If you miss out on enough mortgage payments, you’ll end up on the road. If you simply make small monthly payments spread across all of your debts, you can pay more interest over a longer period of time.
What is the first debt you should pay off?
The following are instructions on how to decide exactly which debts should be paid first, as well as strategies to help you become debt-free. If you still need help creating a debt repayment plan, you should talk to a certified credit counselor by contacting an organization such as the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA). If you focus on the smallest debts first and invest any extra money you have into paying them off (after making the minimum payments on your other debts), you’ll see great progress.
What is the best approach to paying off debts?
If you have credit card funds with you month after month, it may be easier to pay off that debt quickly than you think. Since you have to pay off debts based on their interest rates and target the most expensive ones first, this means you’ll end up paying less interest. Regardless of which debt repayment method you use, you should settle this balance before the end of each introductory period, regardless of how it compares with your other bills. Some people find it much easier to stay motivated when they pay off smaller debts first, regardless of their interest rates.
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Barry Ritholtz is a renowned finance expert, author and blogger. With over 30 years of experience in the financial industry he has gained a reputation as a thought leader and influencer in the investment community.