How to Pay Off Several Credit Cards Without a Debt Consolidation Company
- 1). Gather your most recent statements for all of your accounts. On each one, you should be able to find your minimum payment, your APR (interest rate), and current balance. Write all of these down.
- 2). This step is optional, but STRONGLY recommended, because it could make a huge difference before you make a single payment. Find the contact information for all of your accounts, then contact each of them in turn. Ask them if there is any way to reduce your interest rate, your minimum payment, or both of these figures.
- 3). Once you have taken any adjustments that your creditors have made on your behalf into account, take a look at the interest rates and balances on your accounts. Make a list, arranging them from the highest balance to the lowest, marking the interest rate and minimum payment beside each. Select the lowest balance - this will be the account you pay off first.
- 4). From your monthly income, subtract the minimum payments for each of the other accounts, your housing, food, gasoline, etc. The amount left over after subtracting these expenses will be the amount you pay on that lowest balance every month.
- 5). After figuring out how much you will pay every month on this 'targeted' account, make a timeline. If the balance of the account is x, and your monthly payment is y, divide x by y. This will give you the number of months until this account is paid off completely (with the exception of interest, which might add 1 or 2 months to the time, depending upon the interest rate and total balance.) Example: I have a $1,000 balance, and I can pay $200 dollars a month. 1,000/200 = 5 months to pay this account off.
- 6). After this account is closed, take a moment to celebrate! Then cross it off of your list, and calculate how much you can pay on this account, using the guide in step 4. You will notice that you can pay more toward this account than you could on the last. Continue this process until you have paid off the last account, and enjoy your debt-free life!