In order to get out of debt quickly you need to face your debt issues. It can sometimes be difficult for consumers to admit that they have taken on too much debt, but the sooner you can be honest with yourself, the sooner you can get started controlling your obligations.
Budgeting
You cannot address what you cannot see. A budget helps you to compare your debt to your income and develop a plan on how to effectively pay your debt, according to the financial experts at the MSN Money website. You can also use a budget to determine how much extra money you have each month and where that money can be applied to pay down debt. Get a piece of paper out each month and write down each of your bills, how much your payment is and when it is due. Then write down how much income you have coming in, take expenses such as food and gasoline into consideration and start putting together a way to pay your bills and still put some money aside each month.
Interest Rates
The interest rates on your credit cards are costing you money. There are two ways you can attempt to lower your interest rates immediately. Evaluate the balance transfer offers you receive in the mail that allow you to transfer old credit card balances to a new credit account. Read the fine print to find out what the interest rate on transferred balances will be after the introductory period. If that rate is lower than your current interest rate, then consider switching. Before you switch, you can use the lower interest rate account offer as leverage on your current credit card company. The older a credit account is on your credit report, the better it can be for your credit score. Therefore, you want to give your existing credit company a chance to keep your business. Call up your credit card company and explain the situation to the representative. Tell her that if your credit card company does not lower your interest rate, then you will be forced to take your business elsewhere. If she agrees to lower your rate to something below the new credit offer, then do not make the change. If she will not lower your rate, then switch accounts. Lower interest rates mean your monthly minimum payments will go down and you can apply more money to the principal you owe. That will assist you in paying your debt off faster.
Minimum Payments
Pay more than your monthly minimum payments each month. Minimum payments only address up to three percent of the rotating balance along with interest and service charges added to it, according to the credit experts at the Motley Fool website. Double your monthly minimum payments to pay off your debt faster. Make your payments by phone or in person so that you can insure that the extra you are paying gets applied to your principal and not interest.
Finances
In order to make extra payments and put aside money to pay off debt, you will need to create some sort of additional stream of revenue. Evaluate your monthly bills to see what you can do without until you pay your debt off. Reduce or eliminate your cable television service and have your land line phone turned off if you have a cellular phone. Instead of buying a coffee on the way to work each morning, bring your own and put that coffee money in the bank. A part-time job to generate extra income will also help you pay your debt off faster.
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