By Sharon Omahen

University of Georgia

The holiday decorations are all packed away, the extra pounds
are
packed on and the bills will soon stuff your mailbox. If you
overspent on credit cards this season, now’s the time to buckle
down and pay off those high balances.

University of Georgia financial experts say the key to quickly
paying down credit card balances lies in each card’s annual
percentage rate.

First, make a list

The first step is to make a detailed list of your debts, says
Michael Rupured, a Cooperative Extension financial management
specialist with the UGA College of Family and Consumer
Sciences.

“Make a list of all your debts, excluding your mortgage,”
Rupured
said. “For each debt, write down how much you owe, the annual
percentage rate and the minimum payment.”

Using this list, determine the total you owe, how much you
pay in
interest each month and how much goes toward debt payments.

“Now, plan to make the minimum payment on all but one of your
debts,” Rupured said. “Then put any extra dollars you can come up
with toward that one debt you excluded.”

Pay highest APR first

To save the most on interest, the debt with the highest APR
should be the one you pay more on. Continue applying the same
amount to debt payments every month until all the debts are
paid.

“As you pay one credit card or other debt off, add that
payment
amount to another debt payment,” Rupured said. “So, if you have
seven debts with a combined monthly minimum payment of $725,
continue to pay $725 until you have repaid all seven debts.”

Rupured says increasing your monthly debt payment by as
little as
$25 can knock several months off your debt repayment time. He
also suggests adding any unexpected income to your debt repayment
as well.

“Put tax refunds, bonuses, gifts or prizes toward your debts
to
pay them off even faster,” he said.

Seek help if you need it

If you’re behind on your bills or having a hard time making
even
the minimum payments, Rupured suggests seeking help. Nonprofit
credit counseling agencies can help you develop a debt repayment
plan that fits your budget.

To find an agency, check under “credit counselors” in the
yellow
pages of your phone book.

If most of your debt is on credit cards, Rupured says the true
key to getting out of debt is to stop using them. “If you must,”
he said, “keep one card for travel and emergencies. But leave the
card at home in a safe place until you need it.”

Cut up all your other credit cards, he said. And close out the
accounts so you won’t be tempted to ask the company for a new
card.

Use UGA worksheet

Your local UGA Extension office can be a source of financial
guidance, too. Ask your county Extension agent about the free
PowerPay program. Complete a Powerpay information form and get
several printouts showing a repayment schedule, how long it will
take to pay off your debts and how much you’ll save in
interest.

You can access the program
(www.fcs.uga.edu/ext/econ/creditwksht.php) on the Internet,
too.

“With fewer bills to pay, you’ll have more money, write fewer
checks and even save on postage,” Rupured said. “Taking control
of your finances makes sense and cents.”