Daily Financial Challenge – Day 2

Welcome to day two of the Financial Challenge. Now that you have made calls to try and get your credit card interest rates lowered, the next step is to make sure that you have your credit card repayment plan in order. It makes sense to pay off your credit cards as quickly as possible so that you can stop paying interest to the credit card companies and begin paying interest to yourself.

When you’re in debt, the best investment you can make is paying off your credit card debt. First, the interest rate you are paying on the credit card debt is likely much higher than any return you can get from a standard investment. Secondly, there is absolutely no risk in getting the return — i

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18 Responses to Daily Financial Challenge – Day 2

  1. Caitlin says:

    I think this is a great series and hopefully will help a lot of people. Nice job :)

  2. emanuel says:

    yes , definitely very helpful to those who are motivated to getting on top of their finances .

  3. dwallyfam says:

    I feel good. I had already worked this out

  4. sylvia says:

    good general information

  5. kelly says:

    Definately good advice…I do however think that a big part to succeeding in this chalange is to take your cash inflows and subtract your means (the bare minimum that you can live on), and make sure that you stay at or below this level if possible; using the remaining cash to put towards paying down your debt. This is my main goal currently.

    I enjoy your posts. Keep up the good work!

  6. mapgirl says:

    I didn’t know it till now, but I am participating!

  7. thundermouse says:

    Like a few responded to Challenge-Day 1, I don’t have credit card debt. Have never even applied for a credit card. However, I still find these challenges interesting to read and learn from. This is a total learning experience and some of these credit card tips can apply to different areas. Thank you for this site and approach. This is the sort of thing I needed to keep me motivated and on track.

  8. Tracy says:

    Is this good if your bills are so old they no longer have interest rates attached to them, only balances.

  9. pfadvice says:

    “Is this good if your bills are so old they no longer have interest rates attached to them, only balances.”

    I don’t know your exact situation with the balances with no interest, but just going on that I would pay off all the balances with interest first. While you can actually make more money by then placing the amount into savings and earning 4+%, you do have an obligation to pay back the debts if possible. Therefore I would begin paying them off on a monthly schedule just like above with those 0% accounts placed at the bottom of the list.

  10. Gloria says:

    This system seems like it will work but it also seems a bit complicated. My plan is to pay triple the amount I owe on each card a month. This will be easier now that I am earning more income and that I only have 3 credit cards. This plan has always worked for me and gotten me out of debt.

  11. pfadvice says:

    “This system seems like it will work but it also seems a bit complicated. My plan is to pay triple the amount I owe on each card a month. This will be easier now that I am earning more income and that I only have 3 credit cards. This plan has always worked for me and gotten me out of debt.

    No doubt that it will work – it will just take a bit longer for you to get out of debt and you’ll pay a bit more to the credit card companies. As with all things in personal finances and saving money, you know yourself best and what motivates you to keep going. If that system is the one that will get you out of debt – even is it is slightly slower – it is still far better than doing nothing at all.

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  13. You’ve actually UNDERSTATED the benefits of paying off your credit cards. Interest on credit cards is paid in after-tax dollars. So, avoiding a 12% credit card interest by paying down you balance is equivalent to earning a risk-free 12% return AFTER TAX.

  14. Angelpix24 says:

    I have one little 300 dollar limit credit card. I’ve learned my lesson and got rid of the rest of them. Is this series going to be about how to pay my credit card debt down?

  15. pfadvice says:

    “I have one little 300 dollar limit credit card. I’ve learned my lesson and got rid of the rest of them. Is this series going to be about how to pay my credit card debt down?

    Nope, it’s goingto be about all aspects of personal finances which happens to include credit cards

  16. Bill Halpin says:

    Hello. I like your site. I wanted to add one thing to your advice above. Most people who have balances are their credit cards continue to make new purchases on their cards. If the card they use has a balance, they are charged interest not only on the money they previously owed but also their new purchases. This is a avoidable rip-off.

    It is important that the new purchase are made on a card without a balance. (which of course is paid in full every month….)

    This avoids paying interest on your monthly purchases.

  17. poundwise says:

    Great advice and love the idea of this series. It should prove very beneficial.

    One caveat when paying the minimums, make sure that the minimum amount due is greater than, or at least equal to, the interest charged for the cycle. I have one card that routinely asks for a minimum payment that doesn’t even cover the interest.

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