How to Pay Off Your Credit Card Debt Faster l Snowball Debt

Bad debt is something that has a depreciating cost so if you have a car loan that's a bad debt, if you buy a house that's a good debt; it's like good cholesterol and bad cholesterol Hi! This is Taayla with Engrace Financial Solutions

You are watching Street Smarts with Taayla Thank you for being here I really appreciate it! If you like this video give me a thumbs up, subscribe share it, whatever that we do let's just interact in some ways There is such a thing as good debts and bad debts What is a bad debt to you? Today, what we're going to do is talk about debts and I know it's a big issue in our society but we're going to bring you a solution and help you with that

So, let's go ahead and we're going to unravel this problem Good debt is a when you borrow to buy an asset that is appreciating like a home Bad debt is consumer debt like your credit card The only thing having to own a credit card is having a bad debt because then when you're not paying off your credit card, they're obviously charging you a lot of fees on that So what I am going to show you is a way for you to pay off your consumer debts

It's called snowball effect I did not invent this but it is so good that I want to share with you So, what you have here is four different items of consumer debts; it could be department credit card, credit card, and line of credits You have a total of $20,000 in debts and the different interest rates involved in the minimum that you have to pay for each credit card so the total to just pay the minimum is $200 per month and let's say you have a budget of $400 to put toward paying off your debts Well, that extra $200 what you want to do is just focus on one debt at a time so that means for the first period you put the $200 onto the first debt which is $220 and just pay the minimum on the rest of it

It will take you ten months to pay off the first credit card and then you would take this $220 and you add it to the second minimum amount and that will give you $250 that you're paying it down on a monthly base and what that would do is it would take thirteen months to put this credit card to zero balance and then you continue doing this so from $250 now you add it to the next credit card now that's $300 you do that for 20 months go to 0 from 300 you add it to the $100 so on right so what you see then is that over the course of 72 months, six years you would have paid off this twenty thousand dollars of debts The other option to do so is that you can have that extra $200 split it in four and added to the minimum so that you know for the first credit car you'll pay $70, $80, a $100 so on, right? But what you find instead and I did the math so you're gonna trust me on this is that it will take you nine years to payoff the same $20,000 of debt and what's more demoralizing is the fact that even to pay off one credit card it actually takes over three and a half years so you can do this method, you can look at other method but the point is figure out a plan to pay off your debts because you just don't want that in your life I'd love to hear from you on what you're doing in your fight against debts Share your story on the comments below and let's just encourage the community We want to be able to go to consumer debts zero

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