Would you like to make a 16 - 24% return on your money every year, guaranteed, with zero risk? Without personally knowing you, I can guarantee that the answer is a definitive yes.
"So, what is this magic investment potion?" you ask.
Well, simply put, it's investing in paying down your previous debts.
I know that is not as sexy as you may have been hoping for, but it is extremely effective.
Paying off your debts, credit cards and otherwise, will give you an immediate, guaranteed return.
The average American family is carrying over $8000 in credit card debts.
At an average interest rate of 16 - 24%, that will cost between $1280 - $1920 per year in interest.
That is a very large amount of money to spend per year.
Do you really want to flush $100 per week or more down the drain? I don't.
So, very simply, start paying down those cards as quickly as possible.
The typical advice is to pay down the highest rate cards first, until gone, and then continue paying each card until you have worked your way through all of your outstanding debt.
This is good advice, but I change it a little bit.
I like to recommend that people pay off cards with small balances.
If you have one card with $6000 at 16% and one card with $1500 at 14%, I recommend paying off that smaller balance first.
Get it out of the way.
You will feel like you're making progress, and that is important, especially in something as overwhelming as paying off huge debts.
Now, don't be silly.
If you have several cards at 8% with small balances, and one card at 14% with a large balance, pay down that dramatically higher balance first.
My point is that if you have several cards with similar rates (within one or two percent of each other) knock out all the smaller ones quickly, and then focus on the big rates and high balances.
If you cannot truly afford to pay down your cards, which is nothing to be ashamed of in light of the difficult current economy, then the best advice is to transfer your balances to lower rate cards.
Many card companies will give you a very low rate for an introductory period.
Often that period lasts from six months to a year.
I personally recommend that you opt for offers that give you a great rate for one year or more.
This will allow you to make some real headway on your balances.
The unfortunate truth is that the days of zero fee balance transfers is over.
You will probably have to pay a transfer fee of 3%, so it is important to do the math and make sure it is worth your time and money.
For example, if you have credit card balances of $8000 and are paying 16% per year, moving your balances to a 5% rate would save you $880 for the year.
The fee for transferring would be $240, so moving the balances would be a good financial move, saving you around $640 for the year.
Such a move would allow you to pay down an additional $640 on your principal in that period, by saving on interest.
Because the interest would be dramatically lower, your payment will also be lower.
However, it is still important to pay as much as you can each month, to truly take advantage of the extra effect of your lower interest payments.
Paying down credit debt can be daunting, but it is well worth your time, and is guaranteed to put a nice return back in your wallet each and every month.