How Can You Cut Down Your Credit Card Debt?
April 27th, 2009 | 
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A lot of people are paying about an interest of $1,000 every year for their credit cards. This is really a huge amount. In fact, the interests of credit cards are usually quite high. As a result, it will be better if you can cut down your credit card debt.
So the question here is how you can eliminate the debt of your credit cards. In fact, the best way is not to use any credit card. You should cut most of your credit cards. You can keep one or two cards which are of lower interest rates so that you can use it in case of emergence.
Remember, you are keeping the card for emergence. You should not use it if it is not an emergent case. You have to be very clear that thing such as buying a new hi-fi system is not an emergency.
You can also consider re-structure your debt. This is extremely useful if you have to pay back for more than one credit card. You may move the debt of your cards to loans with lower interest rate. In this case you will be able to settle the debt in a shorter period since you can pay less interest.
Besides, you can also try the following strategy. You can firstly settle the debt of the card with the highest interest rate first. This is because it will help you to save the amount of interest you are going to pay in the future. The exact amount you can save will be a very difficult mathematics question. However, the good news is that you can easily find calculators on the amount of debt you can save from the internet.
You may also consider consolidating your debt. You can do it easily if you have a flat of house. You can use the home equity loan to pay off the debt of the credit cards first. So what is the point or advantage of this? The most essential advantage of this is that the interest will be a lot lower. Again, you will be able to settle the debt faster since the interest you have to pay is a lot lower.
No matter how you try to cut down the debt of your credit cards, the most important thing is that you do not add new debt. As a result, even if you do not cut the cards, you should not use the card to pay. You should only purchase if you have the cash on your hand.
Jerry Leung
http://www.articlesbase.com/personal-finance-articles/how-can-you-cut-down-your-credit-card-debt-346194.html
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Is it ever a good idea to borrow from your 401 to pay down credit card debt?
Never never. Your 401k is investing in your future and taking money out now can cost you tens or hundreds of thousands in the future.
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No. No. No. Was I clear? The penalties you'll be hit with by early withdrawl are way too much. Someplace in the 40 to 50% range.
Go visit http://www.daveramsey.com
He'll help you with those credit cards!
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No
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Sure. Well, it kind of depends on how much you owe and how much you're borrowing and what interest rate those are at.
When you borrow from a 401k, you have to pay the money back, with interest. But the cool thing is, you're paying yourself the interest, instead of a bank or a credit card company.
The only "danger" is if the stocks and bonds and other investments in your 401k are doing a LOT better than the interest you're paying yourself, then "technically" you're losing money (like if the interest you're paying is 8% and all of a sudden your 401k is returning 20%). But then again, if you're using it to pay off credit card debt that has a high interest rate, 25-30% (which is normal), then you're actually saving money right?
And also, you're borrowing – so it's not a withdrawal – so you don't have to pay an early withdrawal penalty, because you have to pay the money back.
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No, you should not borrow from your 401k to pay credit cards. This debt elimination calculator will create a monthly schedule for you. I bet you'll be surprised what you can do on your own.
http://debt.bizcalcs.com/Calculator.asp?Calc=Debt-Elimination
Best of luck making some tough decisions.
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Yes…if it is borrow from your 401k or file bankruptcy or lose your home it is a good idea. Now a days you can take a loan out from your 401k (not a real loan since you are bowerring from yourself and paying yourself back the interest and it doesn't show up on your credit report) so you aren't having to close the 401k and you don't take any penalties or have to pay taxes on the money, this is a great option to pay down debt.
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