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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.




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