How to manage your debts/financial commitments?

Write everything out on paper. Then use common sense. Take the credit cards that yo have and write out the amounts and the interest rates. Then line them up with highest interest amount first... pay all your payments to all cards, but add as much as you can to the one with the highest INTEREST so that it gets paid off quicker. If it is only by an extra $10 a month.. pay it. Once that one is paid off.. then take ALL the money you were paying on that one... and apply that money PLUS the regular payment you were paying on the second highest interest card and pay that one off.... the snow ball will start to roll and before you know it, you will see your debts start leaving you. Granted if the balance on that first one is up in the upper thousands.. might take some time, but trust me... you won't run them up again if it takes you so long and alot of work to get them paid off! Most think to pay off the largest BALANCE first. But again.. they don't tell you the cruel details...... What they dont' tell you is that the interest rate is the more important thing to be concerned about.. not the balance. Take out your statement next month and LOOK AT IT...what is the interest on that credit card balance? I just finally after years, got my husband to see this. He had a card with a balance of $1000 with a minimum payment of $25 a month. Okay, cool, low payment.. I can just pay that off $25 a month. WRONG!!! You won't be paying it off at $25 a month because his interest rate was 24%! So half... yes.. HALF of that $25 went to interest! So the $12.50 left went to principle - or the balance as you see it. So he is not paying the card off at $25 a month.. he is paying it off at $12.50 a month... you do the math... okay I'll do it for you... $1,000 at $12 a month comes to about 6 years... give or take with allowance to the balance going down, but you will most likely only see any difference only when the balance gets down to a few hundred. But for the next 6 years... you are indebted to a $25 a month payment... For 6 confounded years!!! He asked "I've been paying this thing for a year and the balance is still so high!" and was getting really discouraged.. until he listend to me (which he seldom does, and didn't this time other than heard someone else say it and then mentioned it to me and I said.."ah, yeah.. that's what I have been trying to tell you for the last year!) Think of it this way... most car loans are 5-6 years... pay it off and you got a car at the end of the deal... with the credit card... pay it off and you pretty much got nothing! Think of it that way and get a good metality in your head and realize you really need to get yourself out of the mess you put yourself in.

Some people that are struggling to get out of debt get discouraged very easily. If you have credit cards with similar interest rates, try to pay one that has a relatively low balance. The feeling that you will get when you pay it off will help drive you towards lowering the other balances as well. Now if you are trying to improve your credit score in order to obtain a mortgage or some other loan...Don't use the snowball method. A major factor in determining your credit score is percentage of credit used. If all of your credit cards are maxed and you pay one completely off...you are in worse shape than if you paid 20% on all of them.