Updated on 09.10.14

Simple Money Management Steps

Trent Hamm

One of the first money management steps I took when I reached financial armageddon was to take on my credit cards. I was paying hundreds of dollars each month in finance charges and it had to stop or else I would never get out of debt. I didn’t really want to go to a credit counseling service either because I knew that these services often damage your credit because of the heavy-handed approach they use with your creditors.

Instead, I spent about half a day reworking my finance charges and I ended up reducing them by about 80%. After that, I just started making larger-than-usual payments and soon the amount that I owed shriveled up and blew away.

Here’s how I took on the credit cards by myself – and won.

The Balance Transfer Alternative

Apply for a new card with a great balance transfer offer. I applied for one card that was able to support the outstanding balance of two of the cards with an introductory 0% APR on balance transfers. Basically, this just eliminated the finance charges on two of my cards. If your credit is still strong, you can likely eliminate all (or nearly all) of your finance charges just by doing this.

Call the number on the back of each remaining card and ask to talk to a supervisor. Tell this supervisor that the finance charges are just too much for you and you’re considering a balance transfer. Ask them to reduce your interest rate. Quite often (and especially if your credit is still solid), the supervisor will drop your interest rate to keep you rather than facing the loss of a customer. It’s really important to request a supervisor, though, because often the person you first reach on the phone aren’t authorized to make such changes to your account.

Now that you’ve straightened out your finance charges, commit yourself to paying a multiple of your minimum payment each month, starting with your highest-interest card. Some belt-tightening once you’ve leveraged away most of the interest will cause those finance charges – and those debts – to disappear quickly.

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  1. Good post! I like the tips. Just some other things that I have found to be helpful in my experience.

    1) Get someone to cut up the credit cards that you’re not going to use to make purchases anymore. This will prevent you from being tempted to use them. This means the debt goes down, not up!

    2) While you’re paying off your debt, make the minimum payment to call of your cards FIRST. Then use everything else you can afford to put money towards the card with the highest interest rate. The first part is important because you want to keep your credit score intact by not having any late payments.

    Another informative post, thanks!!

    A Financial Revolution

  2. It is very difficult to apply for a credit card with a 0% transfer offer when you have bad credit history and you are already deeply in debt. Looking at the steps you took I would think that the amount of the money you owned wasn’t too big.

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