Stop Whining to Your Lender About the Reverse Mortgage Costs

By Borkow Vanrock

Something to remember: the costs of concluding a reverse mortgage will be lofty. It doesn't make a difference where you reside.

Usually, closing costs are around five percent of the home value, however if the house is considered on the low end in terms of worth, it could be up to 10%.

In my line of work, I talk to borrowers all the time that are not aware of this fact. Sometimes my company even gets the rap for how rough the costs can be.

It's the bank's fault that the costs are so high. Right? Well, I wouldn't say the bank isn't a part of the whole equation, but it's not the whole equation.

The totality of all the closing costs is made up of anywhere from 5 to 9 companies. And don't forget HUD.

If you look at what is known as a Good Faith Estimate of Costs, you will notice a litany of fees. Only one of these fees is charged by the actual lender. It is known as an origination fee.

Don't get me wrong, the origination fee is still substantial. But it is not the majority of the cost.

The culprit behind the bulk of the cost is the mortgage insurance. Two percent of the homes worth (for homes worth $417K and below) is billed to the borrower.

FHA can charge up to eight thousand, three hundred and forty bucks, while the bank charges as much as six thousand for origination.

This is newly legislated by the way. I think its funny that the government has no problem capping how much money the lender can make, but they don't cap how much they can charge.

This is a side-note.. Did you notice all the phone calls wanting campaign donations? Yes, they are excluded from the National Do-Not-Call rules.

Where were we? Closing costs. The company issuing the title on the house is responsible for a good portion of the cost, with a number of fees such as a transaction, title insurance, and binder fees.

Then don't forget the appraisal fee for a formal valuation. In some states you have to get the land surveyed as well. That aint cheap.

I don't know about every states specifications, but rest assured there are other little factors that add to costs as well, and as I said in the beginning, the lender isn't the only one to blame.

About the Author:

In Texas do not get a reverse mortgage before acquiring this guide. Also.. Do yourself a big favor acquire a fact sheet at this reverse mortgage in Texas informational website.

My Credit Card Balance is Zero ? Now What Do I Do?

By William Blake

You have worked hard and paid off that credit card. Now you can start shopping again, right? Hopefully that is not the choice you make. You will be right back where you started. Here are some other options.

*Some financial advisors say that if you keep your credit card but don't use them they can boost your credit scores. That may be the case. But an empty credit card lying around the house may be quite tempting.

If you have accounts that you are not using you will probably not be reviewing them every month. This is a perfect situation for a person who wants to steal your identity. They could do a lot of damage before you ever notice.

*If you are disciplined you could use the card every now and then to keep it active and boost your credit scores. But the temptation would really be there to keep spending until you reach the limit. Then you are back in debt and that is the last place you want to be.

*A less tempting option is to hold onto only your lowest rate credit card and close all the other ones out. This gives you something to fall back on in an emergency situation but you have all those other accounts tempting you to buy.

Even one credit card can get you in trouble if you are not in control. So avoid increased credit limits that give you that extra rope you need to hang yourself.

*If you don't trust your ability to control your spending it is best to close all your credit card accounts and not have access to credit. This may seem a bit extreme but it is better than going back into debt.

Keep in mind, however, that using credit cards responsibly can build up your credit rating, making it easier to get good rates on loans for necessities in the future.

About the Author:

Before you consider consolidation as a way to get your debt paid off, research the debt consolidation loan consequences. It's not always the best solution to consolidate your debt. Find out why on the Inside Debt Consolidation website

Powerful Tips To Significantly Reduce Your Utility Bill

By Jenni Snook

Our first reaction upon receiving our gas and electricity bill is typically to cringe. Many people quickly come to the conclusion that there's not much they can do to reduce the bill. In fact, there is actually a lot your family can do to cut down utility bills quickly. Reading this article will give you a head start in reducing your utility bills for once and for all.

One of the first things you should do is to simply compare the prices offered by different utility companies. Cheaper alternatives may be found by just looking. Utility companies are in fierce competition with rivals, which can only be a win-win situation for you and saving money.

If, by chance, you currently live in a region where there is only one utility company, or where your utility company is the cheapest option out there, then the next logical step is to find out how to use less energy. This may seem impossible but it isn't. Even by applying very simple energy saving techniques, you can accumulate quite a large amount of savings.

One energy and money saving tip is to switch off all the lights in your home except in the room you are using. Many have a bad habit of leaving lights on in unused rooms. Such a habit can result in higher utility bills in the long run. Saving hundreds of dollars a year can be simple as switching off unnecessary lights at home.

Insulation is something to consider if you currently live in an older home. Insulation does wonders for cutting down the amount of heat that leaves your home. With insulation, you can potentially save up to 30%. If, by chance, you possess a boiler in the household, it would be a good idea to insulate that as well. This is good idea especially if you want keep your water warmer during winter. By simply doing this, you can save on the amount of water you used as the heat used to make it hot. Insulating your boiler also reduces the wear and tear helping it to last longer.

There are those people who do not consider reducing their energy bill simply because they are convinced that it is out of their control. Nevertheless, it's amazing how much of our energy bills can be cut by simply seeking out alternatives. By cutting down on energy, you are saving money as well as helping the environment.

About the Author:

Jenni Snook is the premier writer of http://www.HealthyWealthySoul.com, a website focused on providing people recommendations and tools on personal finance planning to have both financial and spiritual bliss in their lives.

For Successful Online Investing, Take A Stock Trading Course!

By Walter Fox

Will we never be free of financial worries? Will worrying actually help? A lot of people are asking these questions nowadays. It is hard to feel secure in today's financial climate. The massive layoffs that are happening these days, give no comfort to the average worker. It just points up the fact that the average American is living day to day with no guarantee of employment.

So, what do you do? First, understand that this does not have to be a time of worry. In fact, it can be a time of reflection. This could be the perfect time to turn your life in a new direction. You may actually find the financial freedom you have been seeking, and maybe more.

A lot of people wonder what it would be like to step out bravely and change their lives. One way to find out is to take up investing and trading. Surprisingly, lots of people are making quite a bit of money doing just that, and the best part is, they are doing it in their pajamas! Thatas right! They are working at home!

Investing and trading can not only bring you financial freedom, it can get you out from under your bossa thumb! Lots of people have turned away from the daily grind to take up investing and trading as their sole source of income. Another option is to use this opportunity to make extra income to pay off your debts or save for retirement.

A stock trading course can tell you everything you need to know about investing options online. Of course, you could just jump off and swim without training, but it isnat really a good idea. There is a lot of strategy to learn, and there are definitions that apply. There is no sense in reinventing the wheel. Taking a course can teach you what you need to know so that you can start off successfully.

A good stock trading course can be found online. A good course will teach you step by step and guide you through the world of online investing. It will not only teach you terms and definitions, it will teach you the various option trading strategies that successful options traders have used.

Generally, taking a stock trading course from someone that is a seasoned market investor is a good option. Someone that has experience in the market can give you tips and insight than someone that only teaches and never invests in the market. An experienced investor can teach you the strategies that made them successful, as well as the ones that did not.

By investing in good training, you will have a definite edge. This planned and professional preparation will put you in a position of success before you begin. You will feel confident about your decisions, and you will know how to execute your choices. Don't rush in too quickly, though. Be cautious at first, in spite of your enthusiasm. Remember that there are no guarantees, so you will want to go into investing and trading

About the Author:

TheScienceOfTrading.com provides 90 free minutes of videos on option trading systems and provides a complete and detailed learning to day trade for beginners to experts.

Here's How The Pros Make Money Day Trading

By Sam Lockwood

One way you can make money buying and selling on the stock exchange is by day trading. This method uses the volatility of the market over the course of a given day to help traders make their money. Currently, we're in one of the most volatile markets since the late 1990s, making it one of the best day trading markets.

Day trading can use short selling to profit from stocks even if indicators say that the prices are dropping in the near future. In every case, day traders will be working through brokers, and they'll have to watch two major indicators. These indicators are the TDISC and the NDIX. At the beginning of a given trading day, these indicators will tell you a lot about what's going on in several exchanges. They're sensitive to volatile markets. When markets are going down, the TDISC drops by more than two thousand ticks in a very short time. When markets are rising, the NDIX increases by the same in under a half hour of opening.

The rapid fluctuations that can happen over the course of a single day are what day traders use to make their money. They have to buy and sell quickly. That's why day trading is both a great way to make a big profit and a fast way to lose it all. You're never buying for the long term, so it can be tempting to buy lots and skip researching. You might get lucky trying this, but most of the time it doesn't work.

Day trading really is a job, rather than a passive income source. If you're thinking about starting it, you need to have the right training. This could come through an online course or a seminar. No matter how you learn about day trading, you need to be able to get into it with your eyes open.

In addition, you'll need to have a brokerage account. After all, short selling is one of the most important tricks day traders have to use. Short selling is when you borrow a share of a given stock from your broker, then sell it right away. You expect to buy another share later on to give back when it comes due. Profit comes to you when the price of stock drops after you sell. Time things right and understand the market well, and you can do very well.

Of course, there's a reverse to short selling, too. Borrow or buy a share at one price, then sell it for more over the course of the same day.

Day trading means you're going to need good observational skills and incredible nerves. You also have to be willing to have a short memory. That's so that you can stare losses in the face without stressing out or going into a panic.

Now, it is possible to do day trading from home and to do well at it. Use the right programs and tutorials to find out everything you can, and make sure all trades are executed according to a careful plan. Be sure to get them done before the last half hour of the trading day in your market, as well.

About the Author:

There's lots of Day Trading Tips out there so it's easy to start educating yourself about this exciting way to make money. Click Here to read about a trading system that has been making many people a healthy income.

Getting Fast Cash Personal Loans

By Dave Davis

Now that the holidays are over, you may need to get your hands on some extra funds. The last two months have probably been quite expensive and your bills might be stacking up. If this is the case for you, consider a fast cash personal loan.

There are multiple methods that can be used to secure fast cash. The first is by taking out a signature loan from a bank. You will have to have good credit to use this method, but your interest rate will be quite reasonable.

Some people resort to getting payday loans to get their hands on money quickly. Most people can qualify for payday loans, however they are quite expensive. You're usually better off using one of your credit cards to get by for a few months.

If neither of those loan types works for you, you can consider taking out a collateral loan. People often take out loans on cars and homes and if you have such assets, getting a loan will be quite easy for you. These loans usually carry the best interest rates because the bank isn't taking on as much risk.

The main reason that some people will stay away from collateral loans is that they are afraid of losing their assets. Since your home or car title is on the line, defaulting can result in the bank taking your home.

Collateral loans are usually better if you need a longer period of time to repay the funds. If you can pay the loan off quickly, opt for a signature loan and pay it off early. Make sure that there is no penalty for an early pay off.

If you need the loan within 24 hours, the best method for you will be to get a payday loan. You can then get a real bank loan that you can use to pay back the payday loan. The bank loan will take a few days and the payday loan can secure your funds now.

About the Author:

Dave helps people to learn about different personal loans that can be used to secure funds. high risk personal loans are easy to get and are available for different levels of credit.

Houston Credit Repair Coach Talks About Rapid Rescoring

By Cliff Pape

Too many people have been losing loans or just paying too much interest because of some inaccurate information that has been reported by the credit bureau on their credit report. You may be able to get your credit score recalculated in a few days by a company who specializes in rapid credit rescoring and who has a special relationship with the three major credit reporting agencies.

The problem is that YOU cannot access them. They can only be accessed by mortgage banks which means you have to ask your loan officer to run a rapid credit rescoring. The rescoring companies also charge a fee so be sure your committed.

I always recommend implementing a strategy to solve the problems with your credit score at least six months before applying for a home loan but I understand that reality does not always go according to plan. It may still be a good idea to ask for a rapid rescore if you are wanting to make a loan application with a month.

What Rapid Rescoring can and cannot accomplish:

1. They are not able to work with YOU:

Reporting agencies are the middlemen between the bureaus and lenders and the smaller ones offer the rapid rescoring. And since they are relatively small, they don't have the capacity for handling direct communication with the public.

2. These services make no promises:

Remember, sometimes removing some negative items from your credit report can cause your credit score to drop! So they cant make promises.

3. They cannot delete legitimate derogatory marks but rapid rescoring services can try to remove some errors:

Proof of an error is necessary. If the credit bureaus have already reviewed your dispute then it will not be included.

4. They can help with errors only if you have proof

The best plan is definitely to repair (or restore, or whatever you want to call it) your credit FIRST because the services require that you have the approved dispute in writing. Otherwise, the usually short turnaround time for a "rapid rescoring" takes much longer - but they may still be able to get the proof for you.

Here is a good example of what you should (or could) use rapid rescoring for. Let's say you have a high balance on a credit card which is harming your score and your ability to get a lower mortgage rate. If you pay down the card electronically now and have a rapid rescorer get your score recalculated within 3 days instead of waiting to get a score boost for it a month later.

Hope this helped anyone.

About the Author:

Home Buddies is a Houston Credit Repair Coach for business and investors in real estate. Home Buddies' Credit Coaching Program takes clients through the process of restoring credit and builds a custom Business Development Strategy to overcome the obstacles to financing properties and growing a portfolio.

Taking Advantage Of A Credit Legal Repair Service

By William Blake

When it comes to restoring credit reports, there can seem to be nothing more important at that present moment. That is because something so simple as a number can hold your entire life back and bring your plans to a screeching halt. There is nothing more embarrassing then being turned down for that new home or car based on a number, which you find to be inaccurate. If you feel that there is something on your credit report that does not belong then it is certainly time to take action.

Generally your basic credit report repair service will be able to assist you but if they cannot, then there are other options available to you. There is such a thing as a credit legal repair service that will also be able to help you if you find that your circumstances require a much bigger answer then that of what the smaller companies can offer you.

When it comes to legal issues, a credit legal repair service company is the place that you would want to use in order to make sure that everything is taken care of correctly and in the right time frame.

Where To Find Them

If you start your search with a basic company and you end up finding that your issues are bigger then what they can handle for you, they may be able to refer you somewhere. That company may have a list of a few credit legal repair services around you that can assist you in your particular situation.

If no one is able to refer you or you just know that you have to start with a credit legal repair service then it is probably going to be up too you to find the right one. If you know of anyone who has used this type of service before then talk with them about their experience. This may help you go in the right direction for finding the right help.

There are also television commercials because there seems to always be an advertisement for a credit legal repair service. Check into what they have to offer and see what all of their services cost. Make sure to shop around so that you are not being taken advantage of but do not go with a credit legal repair service just because they are cheap.

You want to make sure that they are actually going to be able to do the job right all while charging a decent price. You do not want to make the situation worse just because you decided you wanted to save yourself a few dollars.

About the Author:

Are debt consolidation non profit services the best way to consolidate your debt? Not always. Find out why at the Inside Debt Consolidation website

Retirement Planning - A Career Worth Considering

By Michael Geoffrey

As baby boomers begin to reach retirement age many are not thinking about swapping the office desk for a rocking chair and are looking for a change of pace once they hit retirement age. Many are being welcomed into retirement planning careers to put the skills they learned throughout their working life to use to benefit younger workers. With more companies offering 401K retirement plans in addition to other retirement benefits many workers are lost when it comes to how best insure they have enough money to live on after retirement.

Many financial services companies offer a range of employment opportunities for experienced individuals that also provide continued training and support. Special fields within retirement planning careers allow people to use their communication skills, accounting technical resources and abilities to analyze complex plans to work for them and to the companies with which they come into contact.

Those looking for retirement planning careers can help many companies put together retirement plans for their employees including the funding options and disbursement of many of the plans.

There are different aspects of financial planning that might be appealing. There are some who work to market and sale the services of financial planning consultants. There are others who work directly with companies in setting up a plan that is a good fit for the employees of that company. Others offer support to companies who have a retirement plan in place.

Learning New Trends In Financial Services

In addition to setting up and maintaining plans, financial consultant services handle the disbursing of retirement funds and possible loans that may be option under certain retirement plans. The financial world is ever changing and that includes types of retirement investment plans. A financial consultant will keep the company informed as changes and new plans become available and help companies decide how they should respond to these changes.

As always, every company offering retirement planning careers has a need for record keeping in all phases of the business. For recent retirees or those on the cusp of retirement considering a career change, the field of retirement planning careers is growing rapidly and in constant need of talented people.

So if you are nearing the age of retirement but are not quite ready to leave the working world a career in financial planning may be worth considering. The opportunities are out there and you may find this new career very fulfilling.

About the Author:

Before you decide to cut up credit cards to help you get out of debt, you need to understand how it can hurt your credit. Find out what you need to know first on the Debt Smackdown website.

Learn More About Mortgage Refinance Loans

By John Bear

Choosing the right type of mortgage for your situation could indeed save you thousands of dollars. So, first things first. There are two main types of mortgage loans to choose from when refinancing your home mortgage loan that would depend on your financial needs and tolerance for risk. Here are a few simple tips that will help you with the proper selection of a mortgage.

As stated, mortgage refinance loans come in two types: loans with fixed interest rates and loans with adjustable interest rates. Fixed rate mortgages have ten to fifty years of term lengths and will have payments based on an interest rate that will not change for the duration of the loan.

On the other hand, adjustable rate mortgages are specifically based on a financial index, and will include mortgage lenders margin. The other type of mortgage, hybrid loans, are more of a combination of both the fixed rate and adjustable rate mortgages.

The adjustable rate mortgage's interest rate will change every time the lender resets your loan. So when the lender resets not only your interest rate but also your payment amount, they will use the financial index your loan is tied to plus their own margin. The one-year treasury note is the most common index that is being used by mortgage lenders. Adjustable rate mortgages basically have the advantage of lower initial payments, though the loans have more risk for borrowers when the lender begins adjusting the loan.

For those homeowners who understand the risks with adjustable rate mortgage refinance loans, they will be able to save thousands of dollars with refinancing. So don't write off adjustable rate mortgages just because someone told you that you will be in a payment shock when the lender starts adjusting your loan.

There are several advantages to accepting an adjustable mortgage, and as for starters, a low rate mortgage allows buyers to purchase pricier homes, while maintaining an affordable monthly payment. Moreover, because of record low rates, home buyers who obtain an adjustable rate mortgage can enjoy falling rates without having to refinance their mortgage. Thus, they avoid the closing costs and other fees.

Adjustable rate mortgages would definitely suit individuals who plan on moving in a few years. Some individuals do enjoy the stability of living in a place for many years. So in this case, fixed rate refinancing would be the best choice, but if somehow you prefer the flexibility of moving every three to five years, then you can save some money with an adjustable rate.

Luckily, home mortgage loans can be refinanced whenever you feel like it and some lenders even suggest allowing the loan to mature at least 12 months. But if you detect a market trend change, a smart move would be refinancing shortly after purchasing your home. Those contemplating refinancing have got to be prepared to pay additional closing fees. You can contact your current lender and inquire more of prepayment penalties regarding your mortgage refinance loans.

About the Author:

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Exploring the 4 Property Rule

By Susan Lassiter-Lyons

Portfolio lending is becoming increasing popular. One of the reasons for this is portfolio lending is not restricted to the horrific 4 property rule. Through a portfolio lender, it is possible to acquire a multitude of mortgages. However, those looking to procure loans through entities such as Fannie Mae and Freddie Mac will run into the 4 property rule wall.

Obviously new lending rules were needed to curb the losses of hundreds of lenders that are now out of business. But, in my opinion, the 4 property rule is ridiculous. In fact, this rule borders on Socialism. The 4 property rule severely hinders the ability of a real estate investor to continue doing business.

So, what specifically is the 4 property rule? Essentially, the new rules of conventional lending state that a person will be limited to four financed properties at one time. Again, this is a thoroughly absurd rule that undermines many benefits of real estate investing. Basically, if you are limited to only four financed homes, you can not flip property in vast numbers.

And, as an investor this includes your primary residence! Again, this rule does nothing to help real estate investors. It is simply protectionism. And, as we all know, protectionism usually backfires. It does absolutely nothing to help the market and overall economy. Instead, the 4 property rule can significantly weaken the economy.

Before the subprime meltdown, investors took advantage of rapidly increasing real estate values. They would purchase properties at low prices and then sell high. Sometimes, real estate investors purchased huge volumes of properties to resell. The affordable housing they provided had a positive impact on our economy.

If the 4 property rule went away, there would be many positive effects. First, real estate investors would have to put their profits somewhere and my bet is they would go to the stock market. That in itself would provide a huge amount of liquidity. It would also fill up the tax coffers. And, of course, the wealth created would lead to more real estate being purchased thus improving values overall. The 4 property rule accomplishes none of this. I hope this rule will be overturned so we investors can fully participate in and contribute to the economic recovery.

Portfolio lenders, thank goodness, are not bound by this crazy rule. If you need to finance multiple properties, a portfolio lender should be your new best friend.

About the Author:

Susan Lassiter-Lyons has been teaching real estate investors the secrets to investor financing since 2002. Her free report, The Death of Real Estate Investing, reveals how to find portfolio lenders nationwide.

Reverse Mortgage Borrowers Not Getting Lift From Appraisals

By Scweezeme Vanrock

Two days ago I heard from a would-be client, who quickly became a never-would-be client. I say this because I can practically guarantee that I wont be contacted by him again.

He began by flattering my marketing abilities. Once I was buttered up he opened the door to his true inquiry: How can choosing you instead of another lender, get me the largest cash sum possible from my house?

The truth is that nothing can be done differently. There is a formula, used by all lenders of reverse mortgages, to determine how much cash can be taken out of a mortgage.

So he asks me to use an appraiser that really does a "good job". Of course this is code for an appraiser who fudges up his numbers to make the loan or transaction work.

The point being for him, a reverse mortgage lender will lend him a greater amount of money if his value comes in higher.

Many seniors have a desire to pay off their traditional mortgage using the reverse mortgage. It's the number 1 reason seniors are looking at the reverse. But, with waning values, it can be precarious.

Yet the lender can't at all times loan an adequate amount to fulfill this wish if the appraisal returns too low. So the poor borrower has to maintain payment on the regular loan until his home value increases enough to give it another shot.

Appraisers are in a tough spot right now. Yes, they had the luxury for many years to trump up appraisals.

If you are a strict rule following appraiser, the above statement might tick you off a bit, but come on, it is general knowledge this practice was occurring.

Presently everyone in the housing industry is being held responsible for the mortgage debacle, appraisers too. A closer eye is being kept on them than previously.

With the frequency of appraisal reviews taking place, appraisers could possibly lose their license if they don't do things by the book.

So, that is what I told this guy. I haven't heard from him since. I told him other companies would tell him how their appraiser will definitely get him the greatest value.

They all say that. In the end only one is right. I'd prefer to give an honest answer and lose the business.

About the Author:

Find out about the steps to getting a California reverse mortgage. Also, go to this California reverse mortgage website for the basics.

Despite all our concerns, things turned out well

By Rem

For many couples, whether first time buyers or not, the prime consideration when looking at a fixed rate mortgage is the monthly installmet cost. Purchasing a home later in life means that many individuals need to have the mortgage settled earlier. However, there are many factors to consider before signing any papers.

One essential point is to ensure that the rate of interest doesn't change during the life of the mortgage. If you are offered a deal that appears to be too good to be true than it in all likelihood is. Loans arranged for a long term fixed rate mortgage keep the same interest rate throughout the entire life of the mortgage agreement. There are no hidden surprises which is great for many people that want a dependable monthly mortgage payment. When my wife and I were looking at homes for sale we decided to look into the assorted loans available with a fixed rate mortgage. Although it was essential for us to pay off our loan as soon as we could, we didn't need high, unrealistic monthly payments which we would have a problem maintaining.

There are no hidden surprises which is great for many individuals that want a regular monthly mortgage payment. Both my wife and I decided to research fixed rate mortgages when we started looking at homes for sale. Although it was essential for us to pay off our loan as soon as we could, we didn't want high, unrealistic monthly repayments which we would have a problem keeping.

Considering an even longer term mortgage was one alternative if we could not afford the monthly repayments on a fifteen year plan. No-one likes the idea of having a mortgage when they are close to retiring, and we were no other, so it was still our hope that a 15 year fixed mortgage rate would still be an option.

Discovering my wife was pregnant was the clincher, although this wasn't the only reason we reached this decision. Because my wife wanted to raise our child at home we couldn't be certain of her monthly fiscal contribution to our home expenditure. The problem we could see was the raised financial commitment with a higher monthly repayment if we had chosen for the shorter 15 year fixed rate mortgage. It was a case that we merely didn't want to get in too deep and cause troubles in the future.

We also found that we could lower the number of years left on the mortgage by making these odd payments. Although this takes some discipline, it is well worth it in the long run. Although we would have much preferred the loan for a fifteen fixed mortgage rate we had to take our needs and fiscal capabilities into consideration. Despite all our worries, things turned out ok for us in the long run and we don't regret our decision.

About the Author:

Also have a look at Bargain Homes and Home Discount Blog

Eliminate Debt Faster Using the Credit Card Snowball Effect

By Phil Crafton

If you are like millions of other people on the planet, you likely have at least three credit cards with balances of ten to twelve thousand dollars. In addition, you are probably still only paying the minimum payment.

As everyone knows that plan will take you, no where on the path to debt elimination. You will simply sit and spin your wheels hoping that you win the lottery so you can pay off these balances. What if there was a better way?

There is a plan that will help you pay down then pay off all your credit cards! Think about it, you taking control of your financial future. This simple plan is like a credit card snowball effect.

Snowballs start out small and unassuming by rolling them around they will grow in a hurry! Now apply this concept to paying down your balance, start with a little extra and watch it snowball until the card is clear of any balance!

A wise person once said that those who refuse to learn about compound interest are doomed to pay it. No truer words were ever spoken! Therefore, lets begin to learn and turn the credit card snowball effect in your favor and put you on the right path to debt elimination.

Debt elimination becomes more and more difficult when you carry balances on your credit card. The credit card snowball effect in the negative is a compilation of compound interest. Therefore, the idea is to use this same effect to your advantage.

Write down all your cards.

Choose the one with the highest interest rate

Add extra money each month to the card with the highest rate until it is paid off.

Repeat this process for all of your cards as you pay them off.

At first, the glance this seems like a reasonable plan for debt elimination. However, this is not always the best course of action.

No two credit cards will have the exact same interest rate. Conventional wisdom says that it only makes sense to pay off highest interest rates. However, look at the example numbers below.

For the sake of argument, lets say that you have two cards with different interest rates. Let us further assume that the interest rates are ten and twenty percent respectively. Choosing which one to pay will depend on the balance on each. If your 10% card is caring a large balance then your monthly interest accrual will be higher than the larger interest rate.

Conventional wisdom in the above case does not apply to debt elimination. The lower interest rate card in this example will actually increase your debt faster than the higher interest rate card.

Let's take another look of how to use the credit card snowball effect to your advantage:

Make a list of all your credit cards.

Start with the one that accrues the highest interest every month.

Add extra payments to this card until the balance is zero.

Pay the minimum on others until the card with the highest interest accrual is at zero.

Rinse, lather and repeat for all the cards in your wallet.

Looking at it, this way it is easy to see that this will be the fastest road to debt elimination. It is important to always consider financial issues from many angles. This is doubly true with credit cards.

About the Author:

Philip Crafton is an expert in managing your credit, he has mutilple years of experience in the finance and credit industry. Apply for 0% interest credit cards and more at www.Credit-In-Minutes.com. Copyright 2008 credit-in-minutes.com