How to Pay Off Credit Card Debt with Micropayments

Making micropayments enables you to more quickly erase your credit card debt.  A micropayment system can help you pay down your credit card debt faster. Most people pay their bill monthly, which allows more interest to accrue because companies compute that on an average daily balance. However, making several payments each month as money becomes available enables you to lower your average daily balance, thereby lowering interest. As you pay off accounts through this micropayment system, more money becomes available to accelerate your payoff plan.


Instructions:    

1.  Create a budget, allocating the minimum payment due on each of your accounts. Be sure that you hold back money for paying regular bills as they come due. If you are depositing money into a savings account, be sure to include that in your budget. Even if you are in debt, it is wise to save money each month in an emergency fund.

2. Set up online bill pay for all your credit cards. This will save you money on postage and check printing, thereby providing more you can allocate to micropayments.
     
3. Pay your bills on time and as soon as possible, instead of piling up a stack of bills for your monthly or biweekly bill paying session.  If you have extra money at this point, add it to one of your credit card payments.

4. Make a goal to save or earn a specific amount of extra money for weekly micropayments. Most people should be able to come up with at least $15 to $25 weekly in savings and/or extra income.
     
5. Focus on paying off one account at a time with weekly micropayments in addition to your minimum monthly balance due. If your goal is to pay off the card at the highest rate first, then that is where you will apply those payments.

6. Continue paying the initial minimum payment on this card until it is paid off, regardless of how much your minimum payment is reduced.

When that account is paid in full, transfer the minimum payment you were making to the next credit card on your payoff plan and repeat the process.

 Reducing Credit Card Debt is Easier Than You Think.  You can combine the micropayment system with other payoff plans. If you are paying extra monthly to pay down your highest interest rate card
first, spreading out that extra money could actually reduce the total amount of interest you will pay.

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How to Get a Debt Consolidation Loan without Owning a Home

It's always better to avoid a debt crisis than it is to manage one after it has destroyed your credit rating. Before signing up for a debt consolidation loan without owning a home, consider using credit card balance transferring as a means to consolidate debt. If you have multiple credit cards you can often transfer the balance from a high interest card to a low interest card thus trimming back your monthly payments. If that doesn't help then debt consolidation loans are the perfect solution.








Instructions:

1. Getting a debt consolidation loan with owning a home is easy, as many agencies provide unsecured loans for this purpose. However, there are steps to be taken to ensure you are getting the right loan for your situation and be aware of any offer that appears too good to be true. Chances are it's a scam and you are its newest potential victim.
       
2. To get a debt consolidation loan without owning a home you will need to have a good credit rating and an appreciable income because you will need to be able to prove that you can afford to make the monthly loan repayments.
       
3. Take some time to work out your monthly payments, interest and fees on your current debt accounts and plan a workable budget. This will give you a good idea of what you can afford each month for loan repayments.
       
4. Shop around when seeking a debt consolidation loan without owning a home as interest rates and set up fees will vary greatly between different finance companies. Always check out the company's reputation and service history.
       
5. Take your current debt documentation with you including your budget and look at how the debt consolidation loans repayments will factor in.

You want to be sure that you are saving a decent amount each month over your current costs. Then compare the figure with what you need to pay for the debt consolidation loan. Double check your monthly payment on the consolidation loan is less than your other debt payments.

Before you sign anything, be sure to check out all of the associated costs you will have to pay.

Read your loan contract thoroughly.

The down side to unsecured debt consolidation loans without owning a home is that they involve longer repayment terms. The lower monthly payment may offer relief but in the end, you will be paying back much more in total interest.

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When You Pay Off A Credit Card, How Long Does It Take To Show On Your Credit Report?

Paying off credit card debt is a major stress reliever and a financial achievement for anyone who has previously struggled with debt and credit score problems. It often takes years or even decades to get out of debt. Significant credit card debt can negatively affect your credit for a long time, denying you the ability to buy a house or car or secure another type of loan. Thankfully, credit card debt and its effect on credit scores are temporary. Your credit score improves once the debt is paid, though the amount of time it takes to improve varies by situation.







Billing Cycles

A paid-off balance usually will show up on your credit report within one to two billing cycles, or 30 to 60 days. Sometimes it shows up faster; it depends on when the credit card company reports the payment to the credit bureaus. Check your credit report a month after paying off your credit card. If you do not see the payment reflected on your credit report, call the credit card company to find out when they will be reporting the payment. Request that they report it as soon as possible.
   
Negative Records

If your credit card was seriously delinquent, it might take more time for the delinquency to disappear from your credit report. Credit card accounts that are charged off or sent to collections are reported to the credit bureaus. Those charges stay on your credit report for seven years. Bankruptcies stay on your report for 10 years. If you pay the card off, it will be marked as "paid" on your credit report, but the
charge-off or collection status remains for seven years.
   
Errors

If you paid off a credit card but the payment has not shown up on the credit report for several months, it might be due to an error on your credit report. Call the credit card company to make sure they reported the payment to the credit bureaus. If that does not resolve the issue, send a letter to the credit card company requesting that they review the situation and include all supporting documents, such as bank statements that verify the payment amount and date. The credit card company is legally required to investigate and report back to you within 30 days. If an error is determined, the credit card company will contact the credit bureaus to update your credit report.
   
Effects of Paying Debt

In almost all cases, paying off your credit card will improve your credit score. It might improve it slightly, or it might improve the score significantly. Several variables affect how much your score will change, including the limit on the credit card and your overall debt and financial history. It might be more beneficial for you to pay off the card but keep the account open rather than close it completely. Use the card to make purchases, then pay off the debt immediately each month. This will demonstrate responsible use of the card, which will help your credit report and credit score.

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