Rejoice With Me, Credit Card Debt Almost Gone!

[Still_Small_Voice]

Rejoice With Me! My Credit Card Debt is Almost Gone! I owed about $9,700 of debt in 2006. And now I presently owe less than $1,000. It really helped that my debts were at a 3 percent annual interest rate so a lot of my payments would knock out the principle balance.

Does it help your credit score to just make payments on a small balance like I have? I have pondered paying this down to around $500 and just making the minimum monthly payments to have a good credit score. The card is locked in for life at a 3 percent annual interest rate.

[NeuroTypical]

Woo-Hoo Still! That is wonderful news.

But pay it off all the way. Keeping a small balance doesn't help your score - paying on time helps it. We've carried a balance maybe 2 months out of the 13 years we've had cards, and my credit rating is one of the best. I just pay in full every month.

[bytebear]

I was there about 6 years ago. But I owed about 40k. I really just never let it go down and it slowly crept up. Now I have over 30k in an ING account and made 5k in the last year in the stock market. Being debt free and having money to invest is a good thing.

[wondering23]

Congratulations!

I was in a similar position as well. Last year I paid everything off and cancelled my credit card! It's such a fantastic feeling. I now used a debit card and if I can't afford it, I don't buy it.

[nbblood]

Woo-Hoo Still! That is wonderful news.

But pay it off all the way. Keeping a small balance doesn't help your score - paying on time helps it. We've carried a balance maybe 2 months out of the 13 years we've had cards, and my credit rating is one of the best. I just pay in full every month.

Right!! Paying it off will be better for your score than keeping a balance. Paying off a debt is an event that makes the scoreboard. Maintaining a small balance and paying on time is ok, but it is better to pay off.

Congratulations!

[Nikkie85]

Pay it off and rid yourself of those monthly payments. My husband and I have one credit card that stays at home and is only for extreme emergencies. I would rather pay everything up front than have to pay small payments every month. The only debit we have is our home and car. It felt so good when we got our furniture paid and I decided then that we would just save for what we wanted.

[applepansy]

YAY!!!

[Still_Small_Voice]

Thank you for the encouragement and the advice from everyone.

I also think it is so important for people to learn the rule of 72. It is such an important concept to learn with money. You take your interest rate divide it into 72 and the quotient (or answer) is how many years it takes for your money to double.

At a 3 percent interest rate your money doubles in 24 years. At 6 percent your money doubles in 12 years. At 10 percent your money doubles in 7.2 years.

People who know interest have it paid to them. People who don't understand interest pay it on their debts. If a $2,000 credit card is at an 18 percent annual percentage rate your debt will be doubling every four years.