Suze orman which debt to pay first

By opening a new card, you'll also add to your overall credit limit. If you have to use credit, cash-back rewards cards could provide some relief by providing bonuses in categories where you spend the most. As people buy more groceries and travel less, some credit cards issuers are adapting rewards cards benefits to align with spending habits. If you're using a credit card to pay for groceries, consider a card that offers a bonus in that category.

Be careful with rewards cards, though: If you carry a balance, that will probably end up offsetting any potential savings. For example, the Chase Sapphire Reserved and Preferred cards, which usually allow customers to earn points that can be used toward rewards, are now offering enhanced rewards on grocery spending for a brief period.

The bottom line for those experiencing hardship? You have options. Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances.

All examples are hypothetical and are for illustrative purposes. When you owe no interest, every single dollar that you pay on the card goes towards reducing the balance due. Your balance will go down much faster, and your debt will both cost less and be easier to repay. As Orman explains, the benefits of this can more than justify paying the small fee because of the substantial amount you can save on credit card interest.

Of course, Orman warns that you need to read the fine print because there could be pitfalls to watch out for. Specifically, if you make late payments, you could lose your promotional rate and get stuck right back where you started with a high-rate card. She suggests this could be "good motivation" to get your debt paid off on schedule. Orman's advice here is great.

There's no question that balance transfers can save you money on interest and allow more of your payment to go towards principal -- which in turn can help you become debt-free ASAP. If you can qualify for a balance transfer card, there's no harm in following her suggestion, and you could end up a lot better off. However, there are a few caveats to be aware of. You can't confuse transferring a balance with making actual progress on debt payoff.

You also need to be confident that you have control of your spending. If you transfer a balance but are still living beyond your means, there's a risk you could end up charging a lot of stuff you can't afford on the cards with the credit you freed up. This could mean you dig a much bigger hole for yourself because you have the balance transfer card to pay plus you now have a new credit card balance to deal with.

But if you're living on a budget, and you can afford to make the necessary payments to pay down your transferred balance, then Orman's suggestion is a great one, and you should start looking for the best balance transfer cards today. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt.

Read The Ascent's full review for free and apply in just 2 minutes. If you haven't checked your interest rates lately, you're throwing your money away.

Thinking of borrowing money in the next few weeks or months? You may be surprised to find that not all interest charges rise and fall together.

To be a savvy borrower, you need to go where interest rates are going down. Most of you know that the Federal Reserve Board has slashed interest rates dramatically this year. But what, if anything, does that mean for you? For those of you who plan to borrow, here are some money-saving thoughts:. If you plan to take out a fixed-rate mortgage in the next few months, you should be aware that for a long time fixed mortgage rates were pretty much stuck in a holding pattern at about 7 percent despite nine Fed rate cuts in a year.

The reason? Long-term mortgage rates follow changes in long-term bond yields, not changes in short-term rates, which follow the federal funds rate. But now fixed mortgage rates are coming down.

As of October 8 the average year fixed mortgage rate had dropped to just 6. When you remember that year mortgages were going for more than 8. So consider locking in a low-rate long-term mortgage now. Rates have a fair chance of rising if the economy improves and bond yields climb. ARM rates have responded to the Fed's rate cuts. ARMs tend to follow changes in short-term rates, such as the yields on short-term Treasury bills and notes, and these do track the federal funds rate.

When fed fund rates are low, as they are now, ARMs are terrific for people who plan to live in a house for only two or three years. If you're one of these, you might want to consider finalizing an ARM. But those planning to live in their homes for longer than three years should probably look to lock in a low fixed rate, since there's a good chance your ARM rate will rise in future years. Home equity loan rates tend to follow fed funds rates, too, though rates on longer-term home equity loans-with terms of 10 years or 15 years, for instance-are more like long-term fixed-rate mortgage rates.

Because market rates change within a few days of a Fed cut, you may start seeing even lower short-term rates if the Fed announces another cut later in the fall. So the next few weeks and months may be a good time to lock in a low home equity loan rate. In fact, in this interest-rate environment, a home equity loan may be a better choice than a home equity line of credit.

Because instead of paying a variable interest rate, as you do with a home equity line of credit, with a home equity loan you will be locking in a low interest rate for the life of the loan. If you use variable-rate credit cards , your interest rate is indirectly tied to federal reserve rates and you should be benefiting from Fed decreases.

If, however, you have a fixed-rate card or have already hit the minimum annual percentage rate allowed on your variable-rate card, consider transferring your balance to another low, variable-rate card for a better deal. A new variable-rate card may be an even better bargain should the Fed cut rates again.

About auto loans , there's good news and there's better news. Even with the drops in interest rates, few banks and finance companies can match the excellent financing deals available from finance companies affiliated with auto manufacturers, who are rolling out great deals in an attempt to bolster flagging auto sales.

If you're buying a new car, don't ignore dealer financing. If you have a current car loan, you may want to consider refinancing; as of October 8, the average month new car loan had fallen to just 7. A statute of limitation is the length of time someone can bring a legal suit against you. Statute of Limititation for unpaid Credit Card bills: If you fall behind in your credit card payments, the card issuer can sue you for payment.

The start date for the statute of limitations is the date of your last payment. For example, if your last payment was on January 10, , and the statute of limitation in your state for credit card debt is seven years, your card issuer has until January 10, to sue you to recover the unpaid debt.

Please note: That some states consider credit card agreements to be an oral contract,other states consider it a written contract, and some states have specific laws pertaining to credit card lawsuits.

If you have unpaid credit card debt and are concerned about your legal rights, a lawyer can brief you on the specific laws for your state. Toggle navigation. Find an event near you.

Managing Debt. What are collection agencies not allowed to do? Do I have any other legal resource against a collection agency? Denied Credit I have received so many letters from people who have been denied lower interest rate cards and want to know what is the next step.

Paying Off Debt With credit-card debt at epidemic proportions in this country--among the rich, among the poor--you must have seen television programs about getting out of debt, and you must have read dozens of articles explaining how to do it. However, here are ten important points to keep in mind: If you are in credit card trouble, you must cut up all of your credit cards now, with the possible exception of one card for emergencies; do not carry this card in your wallet, however.

You must pay more than the minimum payment every month, as much more as you possibly can. You must pay off the credit card with the highest interest rate first, and the rest in descending order.

You must negotiate for yourself the best interest rates, even if it means switching credit cards every six months. You must understand everything about how your credit card works--all fees, how the company charges you, all about the so-called grace period, everything.

You must honor all your debts equally--whether it's the money you owe Visa, or the money you owe your brother. After you pay off one credit card, you must apply the money you have been paying that particular company to paying off another credit card.

If you doubt that you can do this yourself, you must get in touch with a wonderful nonprofit agency known as the Consumer Credit Counseling Service; they can be reached by calling They will help you organize and consolidate your debt. You must never let this happen again. After your debts have all been paid off, you are to apply the money you were paying all those months toward creating your future. Credit Bureaus Here are the addresses, phone numbers, and websites of the big three credit bureaus, as well as the address of the Federal Trade Commission.

Get Your FICO Score After years of delays, the credit industry finally agreed to give consumers access to their personal "credit scores. Recency and frequency of late payments count too.

In other words, even though a day late payment is not as risky as a day late payment in and of itself, a day late payment made just a month ago will count more than a day late payment from five years ago. Owing a great deal of money on many accounts or "maxing out" on various credit cards can indicate that a person is overextended, and is more likely to make some payments late or not at all. Multiple requests will reduce your score because it looks like you are either trying to get a high amount of credit possibly because of a cash flow problem or that you are being rejected by lenders and having to apply elsewhere.

Your score takes into account what kinds of credit accounts you have, and how many of each. The score also looks at the total number of accounts you have. Forewarned is Forearmed Early numbers show that many consumers recognize the relationship between their credit score and their purchasing power.

How to Improve Your Credit Worthiness Your credit score is a "snapshot" of how risky you appear to be at any particular point in time. No matter how many cards you carry, it's a good idea to keep the ratio of outstanding balance to total available credit as low as possible. Credit scores look at how much of your available credit you've used. When you're close to the limit, you look out of control.

Be aware, however, that paying off a collection account or a judgment will not remove it from your credit report. It will stay on your report for seven years. Research shows that consumers with longer credit histories have a lower risk of default than those with shorter credit histories.

However, even people who have not been using credit for a long time may get high scores, depending on how the rest of the credit report looks. Don't close unused credit cards as a short-term strategy.

In fact, owing a fixed amount but having fewer open accounts may lower your score. Conversely, don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower your score. Every time someone requests your credit report from a credit bureau, an "inquiry" notation is made in your file.

Too many inquiries on your credit report can signal looking for new credit and may lower your score. You should apply for credit only when you need it and wait before applying for more. FICO scores can usually identify "rate shopping" in the mortgage- and auto-lending environment, so that you are not penalized with multiple inquiries related to one credit transaction.

To be safe, it is a good idea to do your rate shopping for a given loan within a short period of time. Note that if you order your credit report from a credit reporting agency to check it for accuracy, it will not affect your score, as it is not an indication that you are seeking new credit.

Someone with no credit cards tends to be a higher risk than someone who has managed credit cards responsibly. Still, it is not necessary to have one of every type of account, and it is not a good idea to open credit accounts you don't intend to use. You don't improve your credit worthiness by carrying balances forward from month to month as opposed to paying each bill in full , but lenders may be more likely to offer credit to people who carry balances because they have a history of paying interest on their accounts.

If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. To find a credit counselor near you, call the National Foundation for Credit Counseling at or look for them on the Web at www. Correcting Errors Consumer organizations advise people to review their credit report every year or two, particularly before making a large purchase like a house or a car.

If you do find errors in your credit report, contact the credit reporting agencies directly: Equifax www. Best Credit Card Rate www. General Resources www. Phone Rates www. Buy Or Lease A Car www. Online Calculators Kiplinger Credit Calculator www. A Financially Free Holiday At holiday time, we tend to show our love for one another by getting pudgy in the waistline because of too many slices of turkey and pumpkin pie and slim in the wallet because of all the expensive gifts we buy for each other, usually on credit.

Christmas and Chanukah Recently I have gotten letters from people whose children are asking to be given money for the holidays. When you give your child--let's say your daughter--money, try giving her the amount you decide on in bills that are all the same denomination--all five- or ten-dollar bills.

On each bill, place a little sticky note that says something about how you feel about her, so that in the future she will have great memories of money.

Even if the money goes quickly--which you know it probably will--she'll always remember the love that came with it. If you are going to give your child money, let her choose the amount she will get.

Here's how to do it. Do not tell her how much money is in any of the piles; ask her to choose just by looking, not by counting or touching. I think it could be fascinating to see what she does--how much do you want to bet that she won't choose the quarters?

Now, if you decide to do this, you may wonder: How will you handle it if she chooses one of the smaller amounts? Will she feel badly, or feel that you have tricked her? She won't, not if you talk to her about what this gift of money means. The real gift is not in the amount of money you give her, but in the lessons that can be learned from our money.