Pay down your debts ... live debt-free

Credit Card Blues: After the Black Friday and Cyber Monday Now that the dust has settled on the Black Friday stakeouts and the Cyber Monday midnight snacks, it's time to take stock of our credit card situation! If, like most of us, you've put your purchases on your credit cards, this is a great opportunity to review their interest rates, and decide upon a strategy to pay them off. After all, there's no point in saving on a great Black Friday deal, if you're going to have to lose it all to interest! There are 2 major ways to think about, when working on paying down your cards: The SNOWBALL method, and the WATERFALL (or AVALANCE) method. In the SNOWBALL method, you tackle the card with the smallest balance first . You make the maximum possible payments into that card, while making the minimum required payments into the other cards each month. Once the smallest debt is paid off, you tackle the next one in the same way, and so on. This way, you get the satisfaction

Do you pay your cards in full each month? You may be able to improve your credit score by paying just before (or on) the statement closing date, instead of waiting for the statement and then paying a few days later. The reason: Credit card companies tend to report the "statement closing balance" to the credit reporting agencies (Experian, TransUnion, Equifax) each month. These balances are used by the agencies to calculate your FICO and other credit scores. If you have paid off your balance in full before the statement closes, the total balances reported for your cards will be lower (or zero), thereby helping your credit score. IMPORTANT! Even with this approach, make sure to check the statement balance each month! There may still be a balance on it, because of any number of reasons - interest charged, purchases made on the last date or online, cable/phone auto-payments and so on. If there is a balance, make sure to pay it as soon as possible. Set auto-pay - alwa

Actively fight the temptation. Most often you're buying something you don't actually NEED The system has made it very easy to just swipe the card ... and buy. But is that item then really yours? No, not really. Ultimately, you owe that much MORE money to the credit card company. And it adds up to EVEN MORE, if you don't pay off the card balance in full each month, since the interest will keep compounding. Step#1 in bringing down your balances - Do not load your cards any more Use them only for convenience (e.g. gas fill-ups), and then make sure to immediately pay off that amount to the card as soon as you come home. Your card balances should come down with each statement, NEVER go up.