How to pay off Large credit card debts quicky

What is the most efficient way to pay off a large credit card tab? The answer may surprise you and the actual interest rate you pay will surprise you even more.

Steps

1. Credit is not the tool you think it is. Remember that credit card companies are in the business of making money. Adopting a "Cash is King" policy will go a long way in stopping your dependency on credit.

2. Stop using your cards. Literally freeze them in a block of ice if you need to. (Hanging a sealed bag of water, with the cards inside, is a fun and mess-free way of doing this.) Or, you can take your cards and cut them in to pieces with scissors, this way you are sure that you won't use them again.

3. Look at your balance. Multiply it by .5. This is your next payment. So if you have a 1000 dollar balance, your first payment is 500.

4. Repeat step one. Each month look at your balance and pay off 50% of it. By the 6th or 7 month you will owe less than $20, and then you pay that off and you are done.

5. If you do this and then calculate the true interest that you end up paying, you will be pleasantly surprised. If our example credit card account had a 15% advertised rate, your would have only paid 2.5% in interest.

6. Track your spending, and find extra money to pay of your debt.Get an extra job,doing extra chores.

7. Stop spending money on the little things.For example: Don't buy your books/DVD's or CD's just lend them from your local library. Don't buy sandwiches outdoor, just make them at your home.

8. Stop spending and save more. Save every month a little bit of money, it may seem not that much, but its a beginning.

9. Look if you can put all of your debts together. This way you don't have to pay all that extra rent to the bank,it will release your debts a little bit.     

Tips

• This method is how you should structure large purchases where you can afford the 50% payment schedule because you are borrowing money for the shortest time possible. Think of it as a sort of pay yourself layaway plan where you get to use the item right away. Say you want a $1000 computer but only have $500 at the end of the month. Get it with your credit card, and immediately pay off $500, and then 50% each month and in 6 to 7 months your balance will be $20 or less which you then pay off.
• Make sure, if paying off early, that you have a payment history of at least four months. While you do want a low debt, you also want to build a good history.

Warnings

• Make sure your credit card allows you to pay more than the minimum payment like this.
• Reputable credit card companies will ALLOW you to do this. Some credit card companies, however, only allow payments every three days. In my case, every payment, every four weeks is followed up with a note labeled There's $xxx.xx you don't get any interest on.