February is the month where the credit card statements from the holidays start to come in and the amount of money spent starts to sink in which may or may not be stressful depending on how you spent your money in December. It’s also the time of the year where most people start planning towards filing the current year’s income taxes and putting money aside for renovations, property taxes, and summer travels with the family. We understand having high-interest credit cards and bills can be sometimes overwhelming and we can help!
We discovered a very useful tool to help manage high-interest debts by prioritizing which debt you should pay off first, it’s called the snowball calculator. You can quickly snowball your debt reduction by using one of two strategies. The first method is by paying off the bill which has the highest interest first and as soon as the first one is paid off, using what would have been the payment and snowballing it towards the next bill – this tends to work for some people.
I prefer the second method whereby you try to pay off the smallest balance first and then destroy the card. For example, if you had a $5,000 visa, $1,000 visa, and $2,500 line of credit, psychologically, you experience the highest sense of reward and accomplishment when you have paid off the smallest balance first. This way you feel that you have paid off one account and you only have two more left to work with. Although this is a longer process and can take some time to discipline yourself, there may also be other ways.
We have helped clients consolidate their high-interest credit cards and bills into one payment by restructuring their existing mortgage to lower their bills each month. We recently helped a client who was able to reduce her monthly bills by over $2,000 each month! If you are in a situation where you have built up some home equity but are feeling stressed over high-interest credit cards and bills, a refinance may be something worth considering. The process is quite simple and, in most cases, funds can be received in as little as 10 business days.
