Another Groovy Tool

Think your credit card debt is getting you into further trouble? You may consider curtailing your holiday shopping a bit this year, as the financial experts say many of will do this year. Yours truly will probably be in the same boat. We're all tightening our belts in wake of the near collapse of Wall Street. Don't get me started on my 401K. I'm still relatively young, so at least my near future contributions, which will remain at the same level, will buy MORE shares. More shares translates into more returns later. Am I right? I digress here.

What I was leading to is I stumbled across a credit card calculator online that will give you an idea of how long your debt will take to be paid off. (LINK: http://www.themoneyalert.com/CreditCardCalculator.html) A "friend" has a credit card charged up to $15,000. Yes, I think we all agree that's a lot on a piece of plastic, but he's making progress on it, paying at least $300 a month. The APR on this card is US Prime (current 5 percent). Yes, the "friend" has excellent credit. At last review, his FICO score was 755. Good thing for him.

Making minimum payments of $300/mo at Prime, if it remains at 5 percent, the person in this example can expect to pay $1595 in finance charges along the way, and the debt will be gone in 52 months. A quicker remedy, of course, might be a balance transfer offer to move the debt to a special (lower) rate. ATTENTION HERE: Read the fine print on those babies. Your incredible deal of 0 percent is usually an introductory teaser rate and may come with a transaction fee. The industry standard now is a 3 percent fee. It's hard to avoid that right now.

As we head into the holiday season and 2009, take some time to consider your financial situation and steps you may take to dig yourself out of debt and save money.