October 6, 2005

Close your Credit Card Accounts?

One of the reasons people get into credit card debt is that they have too much credit available, and are unable to manage it responsibly. If you're working to pay off credit cards, you can lower the risk of getting in over your head again by closing accounts once you have them paid off. After all, it's impossible to charge $20,000 if you only have one card with a $5,000 limit.

So are you paying off credit cards now? Why shouldn't you close the accounts? First, if you know you'll be unable to handle your credit limit without charging it back up again, then close them! Don't risk all the hard work you're putting in now to find yourself in the same situation again.

But if you've learned a lesson from all the stress and sacrifice of getting into and out of debt, it may be beneficial to actually keep your accounts open. Why? Turns out it's good for your credit.

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Posted by Frank at 8:03 AM | Comments (1) | TrackBack

October 4, 2005

Eliminating Credit Card debt: Snowballing

There are a bunch of systems that people use to get out of credit card debt. From talking to people who've successfully conquered credit cards, the system called "snowballing" debt seems to work well.

The snowball system works like this:

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Posted by Frank at 11:31 AM | Comments (9) | TrackBack

August 17, 2005

Cheap or Free Entertainment Ideas

A post at No Credit Needed reminded me how discouraging it can get when you're in the process of getting out of debt. Little changes add up dramatically, but it takes time, and it can be tough to see the big picture when you're stuck in the trenches.

One of the things I think is important while fighting the debt battle is to make sure you're taking time for yourself. Don't spend your whole life worrying about money -- if you have a plan and you're sticking to it, you'll get there in time. You want to escape sometimes so that you can refresh yourself.

But this can be hard if you've given up the things you like to do because they cost money! Movies, restaurants, sporting events... they can get expensive. So I thought I'd share a few alternative ideas that will keep you entertained and cost little or nothing. Please feel free to share your own ideas in the comments!

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Posted by Frank at 10:36 AM | Comments (3) | TrackBack

August 15, 2005

Setting Goals

"If you don't know where you're going, you might not get there."
- Yogi Berra

Maybe a little trite, but it's also true, and for more than just personal finance. Goals give you a target to aim for, and they keep you motivated. When that shiny new plasma TV is staring you down in the store, it's very helpful to remember why you decided not to spend that much money or go into debt.

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Posted by Frank at 8:09 AM | Comments (3) | TrackBack

July 29, 2005

Credit Card Payment Calculator

Do you really know how much you will pay your credit card company if you make the minimum payments each month? Do you know how long it will take, even if you never charge another dollar to your card? This calculator will tell you, and the answers might surprise you.

There is good news, though. If you can afford to pay even a tiny bit above the minimum payment, it can dramatically reduce both the time it takes to pay off the debt and the total amount of interest you wind up paying.

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Posted by Frank at 12:59 PM | Comments (3) | TrackBack