Online Credit Wizard
Is there a debt wizard progrfamme out there which will tell me which debt is best to pay first? Overdraft etc?
I have an overdraft, a credit card and also a loan which i can overpay on. Id like to be debt free asap but know that its better to pay the debt off ina logical order. Is there a programme online which will take all my details and process it for me? I appreciate that any advice will only be advice and not to be quoted…
I only have one credit card
David Bach,author of The Automatic Millionaire, suggests the following calculations, which you can do yourself:
1. Make a list of the current outstanding balances on each of your credit card accounts.
2. Divide each balance by the minimum payment that particular card company wants you to make. The result is that account’s DOLP number.
For example, say your outstanding Visa balance is $500 and the minimum payment due is $50. Dividing the total debt ($500) by the minimum payment ($50) gives you a DOLP number of 10.
3. Once you’ve figured out the DOLP number for each account, rank them in reverse order, putting the account with the lowest number first, the one with the second-lowest number second, and so on.
You now know the most efficient order in which you should pay off your various credit card balances.
4. Pay as much as you can each month toward the card with the lowest DOLP number. For each of your other cards, make only the minimum payment.
5. Once a card is paid off, cut it up — but don’t close the account! Leave the account open so you have credit you aren’t using, which will help improve your credit score.
You can use the DOLP number for your loan and overdraft as well.
If you’re like me, thinking about the bottom line, it seems logical to pay off the debts with the highest interest rate first.
If cash flow is more important short-term, paying off the smallest debts first would reduce your monthly obligations the most quickly and with the least amount of overpayment..
Credit Wizard 1 1 HQ
