A Few Extra Bucks Helps the Balance Go Down

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

Writing the post title 'A Few Extra Bucks Helps the Balance Go Down' made me think of Jule Andrews in Mary Poppins singing 'A Spoonful of Sugar Helps the Medicine Go Down', but paying a little extra on your balances definitely does help your balances go down.

I have put about two thirds of my accounts on a Balance Liquidation Program so far this year. I continue to give kudos to Chase for their fantastic BLP program. Their plan waived thousands in interest plus late and over the limit fees on my accounts.

I do have a couple of credit cards however that are with other banks and I am not putting them on any kind of debt reduction plan. One reason for this is the balances are relatively low compared to my other accounts.

The other is when you put your account on a balance liquidation program the accounts are closed. So I have maintained these account so that still have open lines of credit.

I am so motivated to pay my six figures of debt within the next five years. If I am able to stick with the debt reduction plans I will do just that, but what about the cards that aren't on a liquidation plan?

Hopefully, most of you are aware of the Credit Card Reform Act that went into action on February 22, 2010. Part of the act requires that your creditors show you how long it will take to pay your balances off. They are now required to show you how long it will take to payoff your balance if you pay the minimum payment amount or sooner if you pay a little extra.

If you received a bill from your creditor lately you should see a Minimum Payment Warning that states something similar to this: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance.

For instance, on one account I have a balance of $1,191 and the minimum payment is $33. If I paid just that minimum amount on that credit card it would take me 11 years to pay it off. Now if I were to to bump the minimum payment a measly $10 I would pay off that card in 3 years.

Needless to say, I am going to pay the extra $10 and have that sucker paid off in 3 years. Not only will I have my other cards paid off in three years I will have them paid off 2 years before the cards on the liquidation plans. All for paying just a little bit more.

If you can afford to pay a little extra towards your credit card balance it will save you tons of interest and will be debt free in no time.