Credit question
Hello Terry,
I watch you on WGN all the time and I’m a huge fan. I am a Nurse so I can now pay down my debt. I have a question about my credit. I have gotten various advice from people about this but I want to leave it to the professional. I have a loan for my car plus credit card debt. The smallest of it is my credit card debt which I have been slowly paying off trying to rebuild my credit. Regarding
the credit cards, should I pay one off at a time or pay $100 on each to slowly pay them off? Also my car, should I make extra payments to pay it off faster? I was told to make my payment them call a few days later and make a payment requesting it go towards the interest. I am very curious how you would handle this situation. Just seams I am running in 1 place and getting nowhere with it.
Terry Says
You are really running in place because of the way interest is calculated on the cards! So there is one “trick” to paying down credit card debt.
Take the current minimum monthly payment. Double that amount. Write down that amount — it never changes for this plan.
Pay that same double amount every month and don’t charge another penny on the card. Your balance will be paid off in about 30 months!
I would start with the card that has the lowest balance, or the card that has the highest interest rate.
Attack consistently. Take some overtime or night shifts or private duty and put ALL the money toward paying down that first card. Then NEVER use it again. (But don’t close it if it is your longest-held card, since longevity of credit impacts your score.)
It’s amazing how much progress you can make if you focus on sticking with the plan, and throwing “extra” money at this debt. It’s the only way you can “win” at this credit quicksand scenario.
