How to Save on Debt

The majority of consumers have plans to pay off their debts. But with high interest rates and other fees charged by card companies, eliminating debt can prove challenging. Different techniques can help eliminate your debt, while saving on debt. Tips to save on debt include simple methods that revolve around the way you pay your creditors each month. Employing negotiating tactics can also help you save on debt payments.

Instructions

1

Start with your interest rate. Paying less interest each month on your credit cards can help pay down the principal faster. Take a look at your credit card statements for the month and record how much you pay in interest. Get on the phone with your creditors and ask them to consider lowering your interest rate. A rate reduction helps save on debt because it reduces how much you pay in interest each month. The less interest, the more money that goes to reducing the balance.

2

Stick with bi-weekly payments. Whether you have a mortgage payment, an auto loan or credit card, paying your bills every two weeks (instead of once a month) helps save on debt because this method results in paying less interest. Don't make two full payments. Divide the monthly payment in half and then pay half payments every two weeks. Talk with your creditor or lender first to see if they accept bi-weekly payments.

3

Pay on time. Consequences of paying bills late include additional fees and a possible increase in interest rate. Late fees increase the overall debt balance and result in paying more for the debt. Make a conscious effort to pay your creditors on time to avoid fees and to maintain a low interest rate on the account.

4

Ask for debt forgiveness. If contemplating bankruptcy due to high debts, ask your creditors or lenders to consider a settlement where they forgive a percentage of the debt. This method lowers the amount you owe creditors, and it's a possible alternative to bankruptcy

5

Transfer to low-interest rate card. Save on debt payments and interest charges by moving your high-interest credit card balances to a low-rate card. Monthly debt payments to creditors include the interest charges. Save on interest and you lower how much you owe your card company.