CODE CRACKED: Credit Card Debt

Here’s a brain twister: when your credit card company charges you interest, does it ever make a sound?

The answer is No! Well, here’s your wake-up call.

High credit card debt in this country has reached pandemic proportions. Wanna know a sure-fire way to slice through the high interest and raise your credit score without paying a credit repair company? Read on.

No more minimum payments. Why? The fact that credit card companies “allow” a minimum payment in order to remain in good standing with them is really a joke. The minimum payment barely tickles the principle amount with the great majority of the payment going toward the interest. And I don’t have to tell you, you’re sending the credit card Shareholder’s kids to Ivy League colleges on internet alone, right? Just think; that $50 Amazon thingamajig you bought in April won’t be paid off until some time in September if more than 75% of your $25 minimum payment (or $18.75) goes to interest paid first. So less than $8 is applied to that $50 thingamajig. And before you can pay the bill, WHAM! More interest is tacked onto the balance of $50 minus $7.25.

On top of high interest charges, there’s the dreaded late payment. So while you don’t get brownie points for paying the balance off, you get dinged on your credit if you pay the bill late!

Your new strategy for credit repair will take some discipline. And while this may not work for every financial scenario, it will work for most.

First, make multiple monthly payments. I hear some of you groaning. Read this carefully; the multiple payments you’ll make will be interest-free and you’ll notice your credit score go up, up, up.

How?

Simple, go buy something.

Wait. What?

Again; go buy something.

Credit is a dying animal on life support (your monthly payments) if you don’t use it.

A Client of mine noticed a decline in her otherwise high credit score. “Are you still using your American Express and paying it off each month?”

She told me.

That’s it right there; you’ve got to use your credit (go buy something) in order to keep a high score or raise a falling/fallen score.

Now, just because you’re buying something using your credit card doesn’t mean you’ll make the minimum payment. Absolutely not! No more minimum payments, remember? Pay considerably more. Chunk payments of hundreds, if you can, saving yourself months of interest in the long run. Next pay off the new purchase in the same month and with a separate payment. Think about it, you have the $50 or $250 cash (in your checking/savings) for an item, you can use your credit card to purchase the item, wait about 72 hours for it to show on your credit card statement and pay it off.

There it is; Code Cracked!

You just used your credit, made your score go up and you avoided paying interest! Do it again.

1. Add to your minimum payment.

2. Go buy something (you need, preferably) and then pay it off in the same month.

3. Do it again. And again and again.

You might be wondering at this point how your score goes up. That too is simple. As make your credit card payments, your debt ratio slides in your favor. If your credit limit is $4,000 and your balance is $3,999 you’re just shy of 100% of any possible wiggle room credit wise and therefore considered a high risk (meaning higher interest rates for future purchases) But if you throw more than the minimum payment at your balance pushing you closer to 40% or less, the better you look (sexier) to creditors. And they will pursue you for lower interest credit cards.

Okay pretty soon you’ll be on your bank’s radar; “Hey, Mrs Taylor thanks for all those payments this month. A total of four you’ve made but we’re in the business of making money on you and we’d prefer you didn’t borrow ours and then pay it off before we have a chance to charge you interest. Cut it out, will ya’?

Sincerely, The Establishment”

Okay, so that’s not exactly what they said but I now how to read between the lines. And believe me, I know what prompted that new credit card offer I received in the mail just yesterday. It’s the smell of money, Baby and it gets credit card companies all hit and bothered every time.

Some of you are thinking, but I just wanna pay it off. Nothing fancy. I just want my credit card debt gone.

And good for you. Even after the card is completely paid off you must continue to “play the game” in order to manipulate your score.

Some of my Clients pay for utilities, meals, groceries, vacations, gadgets, charities all using their credit card first and then paying it off in the same month thereby maintaining a zero balance. This form of using OPM (other peoples’ money) has been going on forever; Banks, the Mafia, the US Government. It’s high time regular people like you and me turn the tables and benefit greatly from our own credit.