Your Questions About How To Pay Off Debt Fast

Betty asks…

Pay off high interest or lowest balance first?

I’ve heard a lot of conflicting information regarding paying off credit card debt. Is is easiest to get credit card debt paid off faster by paying off your highest interest credit cards first, or your lowest balances first?

Curious to know if anyone has tried either of these methods and how it worked for you?

richmama answers:

I would agree with the first answerer when he says that mathematically, it makes sense to pay of the highest interest first. However, math doesn’t always work. Getting out of debt is more about psychology and behavior rather than math. Paying off smaller accounts first creates mental momentum. Getting a quick success makes you hungry for more. Plus it frees up monthly money which you can roll over onto bigger accounts.

Mark asks…

What is the best way to pay off our debt?

My husband and I just filed our taxes. We are going use part of the refund to pay for car repairs and catch up on rent.

We haven’t decided how to spend the rest. We don’t know if we should…
a) catch up on all of our monthly bills
b) pay off all three high interest credit cards
or c) pay off half of our medical bills that are in collection agencies (We will only get enough to cover half)

Which option is the best? We want to pay off our debt in the fastest, most efficient way.

richmama answers:

Catch up on your rent first. It wouldn’t matter much about the other debts if you are homeless.If there is a chance your car will be undriveable pay to have it repaired or buy a used car. If you mean utilities etc. By catching up on monthly bills that should be your second priority. Again you need lights and water right now. If you still have the money pay off all your credit cards or at least down to 35% of the credit limit..that looks best on your credit card. Do not to continue to use them or you’ll be right back where you started. Having credit cards maxed out, the bill is up to the credit limit, will go against your credit.

Mandy asks…

How do you pay off an old debt once they have done bankrupt?

I am needing to pay off an old ambulance bill for like a 100 dollars, but they went bankrupt two years ago and no longer exists. I can not find any information about their debt collecting agency from the hospital I was brought to or anything. How can I get this off my credit fast?

I am trying to get into the airforce, thats why I need it off fast, by the way.
I ment to type gone bankrupt, not done.

richmama answers:

You need to dispute the debt with all 3 credit bureaus. You can go online to equifax, transunion & experian to do this. It does take awhile though 30-45 days. The credit bureau will try to contact the creditor to verify debt owed. If they can’t they are required by law to delete the account from your credit. Good luck!

Chris asks…

How to pay off credit cards enrolled in a debt management program?

I have been in a debt management program with a local credit counseling service for about 8 months. My parents have offered to co-sign a loan so I can pay off the cards. The loan with the bank is a lower interest rate than the cards and will pay them off faster with a lower payment each month. Should I pay the cards directly or go through the credit counseling service? Which is better for my credit score?

richmama answers:

The Credit Counseling company will probably get you a better price in the long run because they will negotiate a lower rate than you can. But, you are being charged a very large amount of compounded interest on every dollar that you owe them for every Month that the amount is owed. Let Mom and Dad help IF the interest rate and terms are better than you are currently paying the credit card companies. And, if you can afford to pay all of your bills iccluding that payment. Remember that the credit counselor is making money on you, they will not always counsel you to your advantage.

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Your Questions About How To Pay Off Credit Card Debt

Linda asks…

is using a credit card consolidating company to pay off debt bad for the credit score ?

how long will this afect the credit score when using a credit card company to pay credit card debt

richmama answers:

Сredit repair workеd fine to fix my credit. They disputed and removed lots of bad items from my credit report. I used this service – freecreditreport.sinfree.net

Susan asks…

How long will it take to pay off this Credit card debt?

Have $2,100.00 in credit card debt. The interest rate is 12.99%. The minimum payment is only $41.45. Make a payment of $100.00 per month. How long would it take to pay this debt off, if i continue to make $100.00 payments and not use this card ever again?

richmama answers:

Http://www.csgnetwork.com/creditcardcalc.html

Try out this website. You enter the balance, interest rate and months on top. The monthly payment is calculated on the bottom. Using this website, if you make payments of $107/month, it’ll take you 22 months to repay this debt.

Sandra asks…

Paying off Credit Card Debt with out having to pay the whole balance?

We are coming into some money and I had read a article about how you can pay off credit card debt with out having to pay the whole thing but I cant find the article with all the ‘credit card wordage’ any one have any suggestion?

richmama answers:

Are you referring to debt settlement???

In any case, I doubt if this article is the same as the one you’re referring to, but it may be discussing the same topic:
http://familyfinancialhelpusa.com/five-ways-to-get-rid-of-debt/

John asks…

Can anyone help give me some ideas on how to pay off credit card debt?

I owe about 25,000 in credit card debt, and the problem is I cant afford to pay no more then the minimum payment a month, due to my income. What would be the best thing to do?

richmama answers:

Minimum payments are not going to get you anywhere.

You could get a second job, sell something, or ask for help from your family.

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