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MONEY
2020 TM
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Organize Your Credit Payments
The first step in trimming your credit debt is to figure out just how much you really owe. You can organize your payments by using the Credit Payment Chart. Here's a sample to start you off. Other credit payments you might have to add to the list are educational loans; home improvement loans; checking account overdraft protection; passbook loans, personal loans for insurance; taxes or travel; rent-to-own agreements; and other installment purchases.
Rank Your Debts In Order
If you have more debt that you can handle, you need to decide which debts to pay first and how to pay them. Line (2) on the Credit Payment Chart tells you the most you can safely afford to spend on credit payments.
But you may find that you can't even afford this much. It all depends on your income and other expenses. One technique is to use any money that is not spent on food, shelter, heat and transportation on paying off credit card debts. Utah State University has developed a computer program called PowerPay. This program is designed to find the most cost-effective way of paying off your credit card debts.
When To Use Credit
Credit can be very helpful in times of emergencies. At these times, you may have no other choice but to use credit. But using too much credit can create problems. You and your family have to decide when to use credit and when to use some other alternative to get the things you want.
