Happiness is a state o mind but it is hard to be happy when you are saddled with debts, loan collectors are calling you at dinnertime and you are worrying about your next mortgage payments. If you keep paying your $5,000 credit card bill at the minimum payment, it will take you two decades to pay off your credit and you will pay almost $5,000 in interests. So what should be the higher priority, paying the credit card bill or taking another vacation to increase your happiness? Many people will take a vacation and justify their credit card financed getaway as a payback for their hard days word. Your priority should be to formulate a pay-down plan to get out of debts as soon as possible.
If your credit is good and you are able to get a low interest credit card, get one and transfer all your higher interest credit card debts to the low interest one. If you have paid you bills in the past on time and your income is sufficient, you should be able to get a low interest credit card. If you are not able to get one, list down the annual percentage rate of each loan you have and sort them from the highest to the lowest. Take a newspaper delivery job in the morning, and start paying the highest interest rate cards as much as you earn from your newspaper delivery job.
Never ever you should delay your payment. You will be charged with a hefty late fee on top of your interest fees. The credit card company may also jack your APR a few percentages just because you were late on a payment. Make a budget in the beginning of the month to figure out if you will be able to pay all your loan obligations for that month. If your budget says no you are not able to meet all your loan obligations, you should look at your other expenses and cut them as much as you can, including your coffees, candies, muffins, soft drinks, etc. Take a sandwich lunch to your work, instead of buying lunch from the expensive cafeteria. Your goal should be to pay 10% of your income toward your credit card payment and be debt free.
If your credit is good, call your credit card companies and ask them for reduced APR. Tell them that you have other options and you will transfer all of your balances to another card if they don’t reduce the APR. Sometimes it will work and sometimes it will not. But it is worth a try.
Find out your FICA score by obtaining your free credit report. Don’t be surprised if there are erroneous entries in your credit report. It is happening more and more and credit bureaus are not consumer friendly. Report all erroneous entries in your credit report as soon as possible and be on top of that till they are removed from your credit report.
Make it a goal to get rid of all your debts. Once you are debt free, you will find that you have more money to spend. You may not realize, but all those money that you are giving away to credit card companies in the form of interest may buy you nice vacations and in turn, happiness.