Paying Off Debt 101

What is the simplest way to pay off my debt?

This is a common question most people ask a financial adviser, banker or themselves.

Unfortunately and fortunately there a number of simple ways to pay off your debt. The reason I say unfortunately and fortunately is that it gives everyone hope. Because if there were only one way and you just never could do that one way you would always be in debt.

Simple way #1 is to consolidate all your bills into one payment. Usually you would save some money. Then at that point you should continue to make the same payment.

For example let’s say before the consolidation loan you were paying $900 on all your bills. After the loan your new payment would be $700. The simplest thing to do is to continue to pay $900 on the new loan. This way you will be accelerating the pay off of you bills.

Another reason a bill consolidation loan in good is that usually you are lowering your overall interest rate since some bills will be higher and some lower than your new interest rate.

Simple way #2 is to start paying extra on one bill. This is commonly called Debt Stacking. With simple way #2 you continue to make minimum on all your bills except one. Take all the additional money you are paying on other bills or what you can afford and pay that on one bill. Usually this extra money should go on the lowest balance, not the highest bill or the highest interest rate.

What we are attempting to do with a debt stacking plan is to free up more money the fastest or quickest way possible. This is not accomplished by paying on the highest balance since most likely it would take years to pay off instead on months on a smaller balance.

That’s all for now. Check back again for additional simple ideas to pay off your debt.

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Your Magic Wand for Debt Elimination

What if you could wave a magic wand and all your debt is gone? Wouldn’t that be nice? A little wave, maybe a couple words and all your debt is gone. What type of vacations could you now afford if you had zero debt? Would you be able to send your kids to a better school or college?

It is important to take a look at what credit card debt is NOT allowing you to do. If you had an extra $500 a month would this help with your lifestyle or retire earlier? Let’s take a look at a plan that could save you a lot of money: The Debt Stacking Magic Wand

There is one magic wand and that would be to form a debt plan. Now if you did have a magic wand that’s probably what it would produce. BAM. A debt freedom plan that would show you step by step how to elminate debt quickly and effectively.

One of the best plans is a debt stacking plan. All you do is attack one bill at a time. It could be a department store card, a Visa or MasterCard or a car loan. Whatever bill you look to payoff first the most important part is to only pay the minimum on the rest of the bills.

Usually the best bill to attack first is the one with the lowest balance since it can free up more money quicker than higher balances. Some people think paying off the highest balance makes the most sense since they are paying the most interest on that bill. However, usually the smaller balances will have a longer pay off period than some larger balances.

I know this doesn’t seem logical, but trust me it works. A true debt stacking plan would involve paying more than the minimum on one bill. Hopefully you can pay more than $100 a month towards a plan. Keep paying the $100 extra on that first bill until it is paid off. Then take the $100 plus the minimum on that bill you were paying, say it was $40.

On the next bill you would take the entire $140 plus its’ minimum payment, say $55 . On this bill you would pay a total of $195 until that balance is elminated. Keep doing the same with the rest of the bills.

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The Two Choices We Face by Jim Rohn

Each of us has two distinct choices to make about what we will do with our lives. The first choice we can make is to be less than we have the capacity to be. To earn less. To have less. To read less and think less. To try less and discipline ourselves less. These are the choices that lead to an empty life. These are the choices that, once made, lead to a life of constant apprehension instead of a life of wondrous anticipation.

And the second choice? To do it all! To become all that we can possibly be. To read every book that we possibly can. To earn as much as we possibly can. To give and share as much as we possibly can. To strive and produce and accomplish as much as we possibly can. All of us have the choice.

To do or not to do. To be or not to be. To be all or to be less or to be nothing at all.

Like the tree, it would be a worthy challenge for us all to stretch upward and outward to the full measure of our capabilities. Why not do all that we can, every moment that we can, the best that we can, for as long as we can?

Our ultimate life objective should be to create as much as our talent and ability and desire will permit. To settle for doing less than we could do is to fail in this worthiest of undertakings.

Results are the best measurement of human progress. Not conversation. Not explanation. Not justification. Results! And if our results are less than our potential suggests that they should be, then we must strive to become more today than we were the day before. The greatest rewards are always reserved for those who bring great value to themselves and the world around them as a result of who and what they have become.

To Your Success,
Jim Rohn

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Receive Free Credit Card eBook Today

I am giving away for free my book “How to Beat Banks & Credit Cards at the Money Game.” Visit my site http://www.debtstrength.com to receive this great book.

If you have credit card debt and want to learn how to beat banks at the money game this is the book for you.

I take you through what goes into your credit score and how you can improve your score. I have worked with thousands of clients over the years and have found some common mistakes people make regarding their credit score.

I want to help you lower the amount banks earn from your mortgage, credit cards and car loans. Congress thinks that the new rules they passed are going to help, but not for another 9 months.

Even after the changes we still owe over $960 BILLION on credit card alone. That was BILLIONS, almost a TRILLION DOLLARS.

Take advantage of this special offer today. I have sold it regularly for $17, but I want to get this information in your hands.

Thanks

Teddy Danfield

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Fixed Rate Credit Cards: Do They Exist?

Over the years I have many clients tell me about this great fixed rate credit card at5.99% or lower. They didn’t want to put credit card in mortgage since they had this low rate on their credit card. I would tell them that at any point a credit card company can change their terms even if they weren’t late.

Well jump forward to the present time and I told them the truth. Many major credit card companies from Citi, Chase and Bank of America are now raising rates on people who had low promotional rates. Most of the rates are going from single digits to double digits of 12% or higher.

Why are banks doing this to good paying customers? The banks claim it is to reduce their financial exposure from clients. How does that make sense when their customers payments have to increase to make up for the higher interest rate? It simply is a way to make more money.

Remember, currently banks can borrow money from the Federal Reserve at almost 0%. Now they are lending the money at over 10x the rate they have to pay back. Keep in mind banks make money from lending people your money. This is Finance 101: Customer deposits money to banks. Banks loan money to people and earn interest. Banks pay customer very little interest or in this case the Federal Reserve.

A news article said that Wells Fargo earned over $4 Billion dollars this last quarter. Why or How? They could borrow money for almost free from the Federal Reserve and lend it at 5%, 8% , 12% or more. It is very easy to earn a lot of money from interest.

If you owe any money to a credit card company or bank you owe it to yourself to buy my book, “How To Beat Banks & Credit Cards At the Money Game.” It is almost free considering how much money you will save over the years. I have had clients implement the ideas in my book and save over $40,000 or more in finance charges. Most of my clients had a goal of being debt free and most have accomplished that goal.

If you are sick and tired of being taken advantage of by banks and credit cards you need to do something about it TODAY not tomorrow.

Hope this helps.

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Grace Period & Credit Cards

Grace Period in its simplist terms would be how soon interest starts building on purchases. A Grace Period of 0 days would mean interest starts the next day after the purchase. So if you bought a new pair of pants today for $100 there would be interest owed by the time you receive your statement. If you only paid the $100 there still would be a balance.

For easy math let’s say your interest is 12% which means over 12 months you would pay $12 in interest on the $100 purchase. Once again this assumes you continue to owe $100 for the entire year. In this example you would have $1 of interest on the pair of pants you bought. This is an example of a Grace Period of 0 days. Most credit cards have more than 0 days.

A good Grace Period would be at least 20 days for new purchases. Where do you find the Grace Period on a new account application? It would be found on the back of your application. There is a universal box which shows or explains the details of the credit card. One box discloses the Grace Period for that credit card.

The longer the Grace Period the better for you the customer. I have seen this vary from company to company. I’m sure you have credit cards that you have no idea of the Grace Period on most cards. An easy solution is to contact your credit company for that information. They should be willing to let you know the number of days you have for new purchases. If not, you may want to find a new credit card.

I hope this helps when you are reviewing your credit card applications. Grace Period is usually something no one looks at since they are usually most concerned about the interest rate.

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Credit Card Same As Cash

Over the years same as cash purchases has become very popular. Same as cash offers come from appliance, computer, furniture and home improvement stores. What you need to review with these offers is how soon do you have to start making payments.

I have seen offers where payments are deferred for up to two years. Many people think this is great since you don't have to make any payments for two whole years. However, interest is building on the balance.

For example you purchase a new furniture set from you local furniture store for $1,500. The offer states NO payments for two years. The only problem is the interest rate is probably 19.99% or higher. What this means to you the consumer is that you better pay off that entire $1,500 before that 24th month. If not, the new balance will be $1,500 plus the accrued interest. This can quite significant if you haven't made any payments the previous two years.

With deferring your payments for two years the local furniture store or actually the finance company is hoping you won't pay off the balance in two years. The interest charged is how the finance company will earn their money.

The second type of same as cash offer would be no interest for two years as long as you make a monthly payment. How this offers differs from the first is that some type of minimum payment is required to continue the offer. If you happen to miss a payment the offer may no longer be valid. Whether or not missing a payment will cause such a scenario is based on the company. Always read the fine print.

The monthly payment requirement is actually a good feature since you are required to build some type of payment in your budget. Over the same as cash offer you would be lowering your balance. Just like the first offer the interest will continue to accrue on the unpaid balance.

Same as cash offers are very good ways to save some money on finance charges, but you must have knowledge of what happens after the offer expires. If you happen not to pay off the entire balance by the end of the offer period the accrued interest will be added to your balance.

Let's use the same $1,500 I used previously. Suppose you paid only $1,300 on the $1,500 after the two years. According to most same as cash offers ALL the interest built up over the previous 24 months is added to the remaining balance of $200. This amount can be pretty large and the reason why the finance company made the offer in the first place.

The finance company realizes a certain will pay off the entire balance and some will not. You need to make sure you are not one of the one's left with a balance. To make sure this does not happen to you definitely should divide your balance by the number of months you received the same as cash offer and subtract two months. For example the offer is for 24 months you would divide your balance by 22 months. The reason should be obvious. You don't want to come to the 24 month with a large balance still due.

I hope this helps you when you are looking at making a purchase of a new TV, computer or furniture.



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