Credit Cards

I want to get rid of my credit card debt!! Don't get me wrong: I do not, by any means, think credit cards are evil. However, I do think people are misinformed about how to use them correctly. Here are a few tips I have learned to use credit to your advantage:

• If you can pay your cards off completely every month, do it!
• If you need to carry a balance, it should be less than 20% of your available credit.
• Paying off your balances and letting your cards sit unused does not work to your advantage; using them and paying them off every month does. Otherwise, how will people checking your credit know that you're responsible and trustworthy? (On paper, anyway)
• Having too few or too many cards can hurt your credit score. Try this: use one card for groceries, another for gas (does not necessarily have to be a 'gas' card), another for miscellaneous spending, and keep one for emergencies (if you don't have an emergency fund yet).
• Ask these guys: National Foundation for Credit Counseling 

I can't wait to follow my own advice, but first I need to finish digging myself out of the credit hole I'm in. I'm getting pretty close! The following is my proposed payment plan for my credit card debt.


Example: 
Date
Card Name  -  Payment (Balance)

3/23/11
Chase  -  325 (1825)
BofA   -  50 (1042)
Citi      -  450 (492) *

4/20/11
Chase  -  1150 (675)
BofA   -  50 (992)
Citi      -  30 (462)

5/18/11
Chase  -  675 (0)  !!
BofA   -  150 (792)
Citi      -  462 (0) !!

6/15/11
BofA   -  800 (0) !!

And I'm free of credit card debt! This is a very optimistic outline but it is possible. After the credit cards are paid off, I can focus on paying off my car loan and saving money for both an emergency fund and a fun fund. I will keep all of my credit cards open and use them for different things as mentioned above. Chase will be for miscellaneous spending, BofA for gas and Citi for groceries.


*The purpose of this larger payment is to bring my debt:available credit ratio down in order to help raise my credit score (this card has a rather low credit limit).