The average American household has about $9,200 in credit card debt. I hope you’re in the bottom end of average. I’ve busted more than this already in 2009 (and it’s only February) and I have just slightly more than this left to go before my debt-free goal of July 2009. It’s going to be close but I have faith that we can beat it. What then? I think we’ll go to Disney Land (but not until we’ve saved for it).
CNN Money’s Get Out of Debt calculator:
Enter your debts (they’re optimistic as there’s only five lines but an option to add more). Choose from the following options:
1. Fixed Payments (how long ‘til I’m debt-free?)
2. Minimum payments (how long will it be and how much will I pay?)
3. Debt-free deadline (what do I have to do to be debt free by my desired date?)
This calculator is anonymous and produced by a reliable source (CNN). It is very, very easy to use. Unfortunately, one thing it fails to mention is that this payoff plan will only work if you put those cards through the shredder!
Living on a Dime:
You don’t have to get out all your statements, but you should know what you owe in total and the average interest rate. Plug those in the boxes and you can click “show me the light” which will say how long it will take and what it will cost to be rid of your debt. Another cathartic, though not very useful button is “take it all away” which simply clears the boxes. I realize this is likely so you can re-enter different information and try it again. I put in the same info and “took it all away” several times in lieu of paying a therapist today. I feel better already.
Bankrate.com is a Web site for those shopping for credit cards. If you feel like you’ll be compelled to try… don’t bother, use one of the earlier links. This is a pretty good calculator though. It also shows the interest rates of some other cards. I hope your rates are better than theirs. I know mine are.
What all of these fine organizations fail to do is to remind you to sit down and chop up that card. I’m saving my chopped up card chips for a craft project. Maybe a mobile, or a mosaic or a Christmas Tree ornament. I’m waiting for the inspiration to come to me. (I have strategically tossed some chips from each card in hopes of preventing my relapse into using the cards, but it feels so good to be this close to debt-free that I’ve never felt compelled to use the cards or order replacements.
Another thing that these sites fail to mention is that if you haven’t called in the past three months for a lower rate, you need to do it. Will your card company do a 0% balance transfer from another card? Will they reduce your interest rate for even a short time? I called back in December and got my rates lowered on almost all of my cards. One even told me to call back each month for a lower rate, and would you know, it’s working? My credit card interest rate is now between 5%-8% and it is 0% on one card until August.
Take a look at my post earlier about my results with this technique.
Not having any luck with credit card companies lowering their rates? Many people are using Lending Club to consolidate their credit cards into a single lower-rate loan. I’m an investor (yep, I invest in these kinds of consolidation loans!) with Lending Club, and I’m really happy with the company.
Also, if you’re looking to consolidate, be sure to get rid of those cards so you don’t just start over!