How to avalanche your way out of debt!
Are multiple credit card debts keeping you from purchasing the house of your dreams? Here is a great method for helping you get rid of credit card debt!
This method of paying off your credit cards begins with targeting the cards with the highest interest rate first. Once you've paid off the debt with the highest interest rate, you can then move on to the next highest interest rate card. By applying all prior payments from the paid off debt on to the next one, you will create an avalanche of payments to help get rid of that credit card debt!
With financial institutions and mortgage lenders increasingly focusing on the levels of debt potential homeowners carry, it is important to reduce the amount they carry as this can directly affect the amount of mortgage you are approved for.
Here's how this method works:
* List all of your debts, starting with the highest interest rate and continuing in descending order.
* Focus on repayment of the debt with the highest interest rate first, while making minimum payments on the other debts.
*Apply the payments from the first debt (now paid off) to the next debt, and so on.
Using credit responsibly is incredibly important. Have you been approved for a mortgage and taken out some debt afterwards? Be sure to speak with your mortgage broker to ensure your deal isn't at risk of being cancelled due to any increase in debt.