Your Credit Card Payment Is Rising: Warning Tips - Page 3
Tips for Paying Double Easily How do you pay off your new, higher credit card balance?
Stop Charging Yes, you will have to make major sacrifices to stop using your credit card. But just look at all the money you'll have in ten or thirty years that you wouldn't have if you had to pay all that credit card interest. If you have trouble resisting the temptation to charge, here are some solutions that have actually worked:
*Give your credit cards to a friend or family member to hold in safe keeping.
*Freeze the cards in a block of ice.
*Never carry more than one credit card with you.
Economize on the Small Things According to Michael Peterson of the American Credit Foundation, even tiny savings really add up when it comes to debt. His favorite example is the Diet Coke example:
*If you buy one Diet Coke a day at $1/day, that's $365/year.
*If you instead invested that one dollar a day at 10% interest (the average yearly return on major stocks over the last half century), you would be a millionaire within 56 years.
*Of course, with credit cards, this logic works in reverse: if you are lucky enough to be paying only 10% interest, fifty years of charging Diet Coke to your credit card will mean you've lost the same amount, not only in interest paid, but in the lost opportunity to save and invest.
*You don't have to put aside one dollar a day for fifty years to see a big difference. One dollar a day is $30/month, 15% of the average $200 increase in credit card minimum monthly payments.
*In order to get that entire $200 increase out of your daily budget, you would only have to save $200/30 or less than $7 a day. OK, maybe you aren't drinking seven Diet Cokes at one dollar each a day. But there are very few credit-card-holding Americans who can't cut $7 a day out of their spending.
*Put another way, $200/month works out to about $45/week, or the cost of a restaurant meal for a small family-another luxury you might want to skip until you're debt-free.
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