Friday, May 27, 2011


Did you know there is such a thing as the Credit Card Association of the Philippines (CCAP)? I found out about it last May 26 when Maritess and I were having our breakfast at a fastfood chain, they gave us a free newspaper. As I scanned the paper, I saw CCAP’s report on its annual conference that day at Sofitel Philippines Plaza Manila.
The amazing thing that CCAP said was “with a budget, some dedication, and a lot of discipline, your credit card debts can be wiped out.” It looks like they want you out of debt. Uhmmm.

Here are some recommendations they have proposed to wipe out your credit card debts:
1.       First thing, find out exactly how much credit card debt you can afford to pay off.
2.       Make a budget so you can know how much to pay whom.
3.       It is considered wise to put aside thirty (30%) percent of your monthly income as savings. What is left, after paying off your monthly fixed expenses, is how much you can dedicate to eradicating your debt.
4.       There are two preferred methods for paying off your cards: highest interest rate first, or lowest balance first.
5.       Paying off your credit card with highest interest rate will save you money in the long run, especially if the highest rate card happens to be the one with the highest balance.
6.       Paying the lowest balance first is much easier, and the debt is taken care of much quicker. Personally, I prefer this method as it helps you see the evidence that you are actually zeroing out your debt and gives you motivation to move to the next card and the next, until everything has been settled.
At the end of the article, CCAP admits that it will take some time to get completely debt-free- but once you are, there is nothing stopping you from investing and making your money work for you instead of the other way around.

This week, I am happy to eradicate one of my credit card debts. As I paid the balance, it became clear to me how much money I lost paying off the finance charges and late payment charges this credit card was charging me month after month.
One lesson I learned and I want to pass on to you: always pay your card on time, and you must always pay your full balance in order to escape the interest that will be levied on you!

To your debt-free life,

1 comment:

  1. In the U.S. there are many options in getting out of unsecured debts like credit card debt. There's debt consolidation, credit counseling, debt settlement and bankruptcy. Debt settlement is the quickest solution among these options, as it is the most aggressive in its approach. In debt settlement, you negotiate your debts for less, typically a fraction of your actual balances.