3 Tips For Getting Out Of Debt Faster
If you feel like you're on a hamster wheel, constantly juggling payments on credit cards and other loans, you're not alone. There are a lot of people in the same boat as you (or worse) - especially with the way the economy has been over the past year or so.
Unfortunately, most people don't know how to get their debt paid off faster, they just make payments here and there to try to bring it down as much as they can. By taking a few simple steps, you'll be able to get your debt paid off faster than you might think.
The first step is to take inventory of what you actually owe. I know it's hard to actually put it all down on paper and see that total at the bottom, but if you don't know exactly what you owe and to whom, it's pretty hard to prioritize the debts and start paying them off quicker.
Once you know exactly what you owe and where, the next step is to decide which debt to focus on first, and get it paid off. Instead of making more than the minimum payment on several debts, you're better off to make the minimums on all but one and put every extra dollar possible towards the one.
Get that one paid off first, and then take the payments you were making on that debt and add it to the minimum payment on debt #2. Once that one is paid off, move on to the next one and continue doing this until all the debts are gone.
This method is known as the debt snowball, because of the way your payments will snowball as you get more and more debts paid off.
The third thing you can do to get out of debt faster is to contact all your creditors, especially credit card companies, and ask for better terms. The credit card business is highly competitive, and most of the companies will be willing to negotiate lower interest rates for you if you ask.
If you have offers from other credit cards at better rates than what you currently get, this gives you even more leverage and you can almost be guaranteed that you will get a better deal from your credit card company. They don't want to lose the interest they're making from you, and would rather make a little less than none at all if you transfer the balance to their competition.
Doing these three things isn't going to get you out of debt overnight, but it can certainly take months or even years off the time it will take you to become debt free.
Unfortunately, most people don't know how to get their debt paid off faster, they just make payments here and there to try to bring it down as much as they can. By taking a few simple steps, you'll be able to get your debt paid off faster than you might think.
The first step is to take inventory of what you actually owe. I know it's hard to actually put it all down on paper and see that total at the bottom, but if you don't know exactly what you owe and to whom, it's pretty hard to prioritize the debts and start paying them off quicker.
Once you know exactly what you owe and where, the next step is to decide which debt to focus on first, and get it paid off. Instead of making more than the minimum payment on several debts, you're better off to make the minimums on all but one and put every extra dollar possible towards the one.
Get that one paid off first, and then take the payments you were making on that debt and add it to the minimum payment on debt #2. Once that one is paid off, move on to the next one and continue doing this until all the debts are gone.
This method is known as the debt snowball, because of the way your payments will snowball as you get more and more debts paid off.
The third thing you can do to get out of debt faster is to contact all your creditors, especially credit card companies, and ask for better terms. The credit card business is highly competitive, and most of the companies will be willing to negotiate lower interest rates for you if you ask.
If you have offers from other credit cards at better rates than what you currently get, this gives you even more leverage and you can almost be guaranteed that you will get a better deal from your credit card company. They don't want to lose the interest they're making from you, and would rather make a little less than none at all if you transfer the balance to their competition.
Doing these three things isn't going to get you out of debt overnight, but it can certainly take months or even years off the time it will take you to become debt free.