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Marriage
When Love, Marriage and Money Come Together
- Determine how much you owe. Gather
your credit card statements, and make a list that includes interest rates, balances,
and minimum monthly payments. List the cards by the interest rates they charge,
with the highest rate first.
- Keep the card with the lowest interest
rate and cut up the others. Close those accounts.
- If you don't have a card with an
interest rate of less than 14%, get one.
- Resolve that you will use your cards
only for essentials over the next six months. For other purchases, use cash or a
debit card.
- Credit cards often require minimum
payments of about 2.5%. If you just make minimum payments, you will be paying your
debts forever. For example, if you owe $1,000 on a card with a 17% interest rate,
it might take 12 years and cost over $900 in interest by the time you pay it off.
- Calculate how much you can pay over
the minimum. Try to stretch your budget. If the minimum payments on your credit
cards total $350 a month, for example, how much could you pay if you really stretched?
$750? No pain, no gain.
- Apply any additional funds towards
the card with the highest interest rate. If
two cards have the same rate, apply
additional funds toward the card with the largest balance. Pay the minimum on your
lowest interest rate credit cards until you've paid off the balance on the more
expensive cards.
- Consolidate your debt. Many credit
card issuers offer introductory rates as low as 5.9% for six months. If you're really
serious about getting out of debt in a hurry, transfer your largest, high-rate balances
to a card with an extremely low rate and pay them down aggressively.
- If you are unable to transfer
all balances to one low interest rate card due to your debt-to-income ratio or because
you are juggling your card payments, then consider contacting a credit counselor
at 1-800-320-9929. Debt management programs usually can help you organize debts
into one low monthly payment, reduce or eliminate interest charges, and help restore
credit ratings.
- Consider using your savings to get
out of debt. Sure it sounds harsh, but if you put together a balance sheet, your
debt would cancel out your savings anyway. If you have money in the bank, you're
earning about 2% to carry debt at 18% or more.
