Using the web to get back in the black
Ready to get on top of your credit card bills? Finance
wiz Nancy Dunnan gave me these handy tips.
1.
Shop around for a low rate, starting with Money magazine's list of the best credit card
rates. You can use this info to lean on your current credit card
company to give you a better rate. Threaten to switch
cards -- it usually works.
2.
If you owe money on more than one card, check your monthly statements to see
which one has the lowest rate. Call its customer service department and tell
them you'd like to consolidate your debt and transfer it to them. (But find
out if there is a charge to transfer your balance and how long the current
rate will last.)
3.
Pay
off the card with the highest rate first -- NOT the card with the
biggest balance. While paying this one off, continue to pay the minimum on
your other cards. (In fact, always pay at least the minimum due each month on
every card.) When card #1 is paid
off, move on to the next highest rate. Even if you pay an extra $25 per month,
you'll soon notice a difference.
You can use the calculator at FinanCenter to figure out
how different interest rates and payment schedules affect your total costs in
the end.
4. If you can't
handle your debt load, stop charging now. Instead, pay
with cash or a check, and leave your plastic at home. Carry traveler's
checks to cover emergencies.
Use Money magazine's
interactive worksheet, How to win the war on debt, to figure out if the amount you owe
is more than you can handle based on your take-home pay.
5. Take a look
at your spending habits. When do you use cash? When do you use credit
cards? Can you cut spending (eat out less often, quit buying gourmet coffee
every morning, etc.) and take the dollars saved to pay off debt? Target a
date when you'll be debt-free, and stick
to your payoff plan.
Dunnan is the author of "Dun & Bradstreet Guide to Your
Investments 1997" (Harper Perennial; to order, 800-331-3761). She writes the
Cash flo column on Women's
Wire.