No. of Recommendations: 1
Great discussion on how to dig out at:
http://www.fool.com/credit/payback.htm

I have one suggestion for 1. Pay More Than the Minimum

The Fool suggests: "Instead, bite the bullet and pay as much as you can each month. If your minimum payment is $100, double that to $200 or more."

The problem with this advice is that if spending is not kept in check you can double the minimum and still go further in debt. Of course if the card is already maxed out the bank limits your spending for you, but I notice that the banks love to increase credit limits as long as payments are on time.

So, the card holder must learn the spending discipline on his own.

I think suggest to forget about the minimum payment and focus on the "new charges" that appear on the current statement. Then make a payment calculated as follows: New Charges + Interest + $100.00.

This sounds simple, but it immediately forces a recognition that you cannot follow this formula if you keep spending more than you make.

Of course spending more than you make his how a real fool gets into credit card hell in the first place.
Print the post  

Announcements

UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement