Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Cards
Profile Image

Question By
changes2014

0 Contributions
0 People Helped
pay off credit card debt and raise credit score
I do not have the economic means to pay off my credit card debts and non student loans immediately. I was wondering the best way to pay off the credit card debts and non student loans within 2 years and raise my credit score in the process.

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
73 Contributions
59 People Helped
Most Helpful Response

Helpful to 1 out of 1 people

On-time payments and lowering your credit-to-balance ratio automatically raise your score. So at least make the minimum payments on time, though you should make more than the minimum if you can.

If you feel like you're stuck spinning your wheels by making small payments and not seeing those balances decrease, you can try the "snowball" effect. But it's really only effective if you can budget a chunk of money each month to do it. Here's how it works....

1. Figure out how much money you can spend on your credit card balances each month. Let's use $500 as an example.

2. Pick your highest interest rate credit card. That will be your "snowball" card.

3. Make the minimum payments on all your cards except the "snowball" card.

4. Subtract the minimum payments you made on your other card from your $500 budget.

5. Put the remaining amount on your snowball card.

6. Repeat until snowball card balance reaches zero.

7. Rinse, repeat with your next highest interest card and so on.

An example of how this works...

Card A has a $2,000 balance, 15% interest rate, and minimum payment of $50

Card B has a $1,500 balance, 18% interest rate and minimum payment of $30

Card C has a $1,000 balance, 17% interest rate and a minimum payment of $25

Pick card B as your snowball card.

Pay the minimum balances on Card A and C $50+$25=$75

$500-$75=$425. Pay $425 on card B.

I hope this helps! :)

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.