How To Get Rid of Debt
Ignored, debt is a nasty beast that will chew up the health of your financial landscape when you're not looking.
Filing your bill notices and reminders in the trash can and dodging calls from collectors will only end up biting you in the rear a few months down the road.
You're only hurting yourself when you ignore debt; usurious interest rates of 20% or more that compound month after month to infinity, can turn a debit once realistic to wipe out into a big, hairy monster that will be a burden to you forever.
But, you can stay out of the debt doghouse by following some of these tips: Over pay the minimum: Stop the bleeding by paying off more than the minimum required by your creditor.
Usually, only 2% to 3% of the balances is required to be reimbursed each month, but you should pay back as much as you can to wipe the slate clean quicker.
The longer it takes to repay, the more money the bank makes in interest from you - and they are hoping to make a lot, don't let them! Consolidate debt payments: Review all your credit cards to find the one with the lowest interest rate.
If you have not maxed out your credit limit on the low interest rate card, consider transferring higher-interest bills to it.
With a few phone calls, you can have traded a high interest debit for a much lower one that won't take as long to pay off - this "snowballing" technique is a no-brainer! Take cash from savings: Most folks shudder at the thought of breaking the nest egg to pay off a debt.
But if you examine it logically, a savings or investment account making only a few percent in interest can be better used to pay off a high-interest rate debt.
The higher the interest rate on your debt, the more attractive reimbursing the creditor versus socking away investment dollars becomes.
Borrow from life insurance: If you have a cash-value life insurance policy you can borrow against the account.
While this will be your own money, the benefit you gain is that the interest rate is usually much lower than your consumer credit card rates.
However, after you've regained your solid financial footing, you'll want to settle up on the life insurance policy for the benefit of your family just in case the unspeakable is in your near future.
Filing your bill notices and reminders in the trash can and dodging calls from collectors will only end up biting you in the rear a few months down the road.
You're only hurting yourself when you ignore debt; usurious interest rates of 20% or more that compound month after month to infinity, can turn a debit once realistic to wipe out into a big, hairy monster that will be a burden to you forever.
But, you can stay out of the debt doghouse by following some of these tips: Over pay the minimum: Stop the bleeding by paying off more than the minimum required by your creditor.
Usually, only 2% to 3% of the balances is required to be reimbursed each month, but you should pay back as much as you can to wipe the slate clean quicker.
The longer it takes to repay, the more money the bank makes in interest from you - and they are hoping to make a lot, don't let them! Consolidate debt payments: Review all your credit cards to find the one with the lowest interest rate.
If you have not maxed out your credit limit on the low interest rate card, consider transferring higher-interest bills to it.
With a few phone calls, you can have traded a high interest debit for a much lower one that won't take as long to pay off - this "snowballing" technique is a no-brainer! Take cash from savings: Most folks shudder at the thought of breaking the nest egg to pay off a debt.
But if you examine it logically, a savings or investment account making only a few percent in interest can be better used to pay off a high-interest rate debt.
The higher the interest rate on your debt, the more attractive reimbursing the creditor versus socking away investment dollars becomes.
Borrow from life insurance: If you have a cash-value life insurance policy you can borrow against the account.
While this will be your own money, the benefit you gain is that the interest rate is usually much lower than your consumer credit card rates.
However, after you've regained your solid financial footing, you'll want to settle up on the life insurance policy for the benefit of your family just in case the unspeakable is in your near future.
