Credit Expert John Ulzheimer has some helpful advice for getting out of credit card debt in 2012.
(AP File Photo)
Atlanta - Is your goal in 2012 to wipe out your credit card debt? Here's how to do it faster and hopefully preserve your credit score.
Credit Expert John Ulzheimer says the fastest way to pay off your debt is pay at least the minimums and put any extra toward the cards with the highest interest rates first. "Take all of your credit cards, list them on an excel spread sheet and then attack the most expensive debt first," Ulzheimer says. When you pay off one card, take that payment and put it toward the next highest interest rate card, along with the minimum payment and so on until everything's paid off.
If your top goal is to increase your credit score,you may want to take a different approach John says. Pay off the cards that are closest to their limits first. "If you leave balances relatively high to their limit then you are lowering your fico score," Ultzheimer said. Which he says will cost you more in the future in the form of higher interest rates.
Also call your credit card companies every once in a while and ask them to lower your interest rate but stay away from for profit companies that offer to negotiate for you. It could cost you even more.