If you are one of the millions who struggle with piles of debt, there are several ideas you can use to reduce the amount you owe. Getting out of debt is always more difficult than getting into debt. Even if your debt seems to be out of control, taking simple steps today will help you get onto the road of living a debt-free lifestyle.
Lower Interest Rates
Requesting lower interest rates is one way to substantially reduce debt on your credit cards. Over the lifetime of your card, thousands of dollars can be added just from high interest rates. Many credit card companies are willing to work with you to lower your rates. Ask for a second representative, if the first one you speak with at the credit card company won't help you. You may find that some representatives are more compassionate to customers than others are. A small reduction in the interest rate can make a huge difference.
Stop Overspending
It's very easy to overspend using a credit card because you can't actually see the cash in front of you. Using your credit card and only making minimum payments double sand sometimes triple the price you end up paying, even if an item is on sale. Credit cards should be used only for emergencies when you are trying to reduce debt. If such a situation arises, use the card with the lowest interest rate and pay the card off in full when you get the bill.
Snowball Plan
The snowball plan can help you feel more accomplishment as you start to reduce the amount of debt you owe more quickly. Start with a list of all debts with balances from smallest to largest. Pay your smallest debt firsts before paying off the one with the highest interest rate. Cross each debt paid off your list. This will encourage you to work harder to eventually pay off all your debt. Also, take the money you set aside each month to pay off your small debts and put it toward your larger debts on the list. Continue this process until you eliminate all your debts.
Second Job
One way to make extra money to reduce your debt is to take on a second job. Even just working a few weekends or some nights can help you to reduce your debt quickly.
Skip the Vices
If you buy specialty coffee or smoke, quitting may have a dramatic effect on your ability to pay down your debt. Saving $7 a day can add up and by the end of the year you have saved around $2,500. Cut up all your credit cards to avoid spending cash you don't have on items you really don't need.
0 comments:
Post a Comment