Personal Finance: Simple tips to pay off credit card – USA TODAY

Robert Powell offers advice on all matters of personal finance. His column appears Tuesdays and Thursdays at

I owe $6,000 on my credit card with 9.8% APR. How can I pay this credit card off ASAP? I have $300 per month to pay down on it.

— Michael Jones, Mableton, Ga., among many other organizations, has an online credit card calculator that can help you determine: 1) how many months it will take to pay down your credit card debt given a certain payment, interest rate and credit card balance, or 2) how much you would have to pay to be debt free in a certain time period.

In your case, you’ll be debt-free in 22 months if you pay $300 per month toward your balance. If, however, you want to be debt- free in 12 months, you’d have to up your monthly payment to $527.

If you decide to pay any amount above the minimum due, consider this: The CARD Act changed how the banks have to apply any money above the minimum due, says Gail Cunningham of the National Foundation for Credit Counseling (NFCC). Although the minimum required payment typically goes to the part of the balance with the lowest interest rate, lenders must apply any payment above the minimum to the part of the balance with the highest interest rate, says Cunningham. Different transactions on a card may carry different interest rates (think balance transfer, cash advance, and the like).

Cunningham also advises consumers to call their bank and ask if a better interest rate is available. Being told no is easier to swallow than paying an unnecessarily high interest rate month after month, says Cunningham.

While you’re paying down your debt, check your credit score if you haven’t done that recently. The Fair Credit Reporting Act requires each of the nationwide credit reporting companies — Equifax, Experian and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. You can learn more about that at the Federal Trade Commission’s website,

Robert Powell is a veteran personal-finance journalist who also writes for USA TODAY, The Wall Street Journal and MarketWatch. You can submit a question using the form below.

Personal Finance: Simple tips to pay off credit card – USA TODAY}

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