Cut up and throw away those credit cards
When you graduated from high school way back in the day, you probably figured that you would go to college for four years, graduate from college, get a good job, buy a nice house and car, and live life without many stresses. You probably also thought that you would never make the same mistakes your parents did about credit cards and debt. Of course, parents are always right and their warnings about credit cards proved to be spot on. So now, instead of living that dream life, you are living a life with five maxed credit cards, a home mortgage you cannot afford, and a very amused couple of parents.
It's a fact that debt is a huge problem here in America. The American financial system actually relies on people being in debt in order to function. If you want to buy a house, you either have to go into debt or pay upfront in cash. If you want to buy any large purchase, the company automatically checks your credit score, a score awarded to you for successfully being in debt. The problem that lies in the system is that many people take advantage of credit and end up putting themselves in positions of what seem like paths with no return. However financially messed up you may feel, there is a way to relieve some of that pressure and get back on track to getting out of debt. Debt consolidation can help you do those things.
Obviously the first step to financial freedom is to sit down and evaluate how much money you owe in total and to which places you owe it. If you happen to have debt with many different credit and loan organizations, figure out which places are charging you the most in interest rates and list them from the highest to the lowest. The credit cards with the highest interest rates are the ones you are going to want to pay of first because they are costing you the most money out of pocket.
Next, cut down your credit card resources. Keep the two credit cards that offer the lowest interest rates, and then cut up and throw away the rest of them. Before you completely close the account of the other credit cards, be sure to check with the institution for their policies. Pay off those high interest cards first and then completely close the accounts with them. Cutting up the cards and paying them off allows you no excuse and no way to fall back on those tempting cards.
Another helpful tip is to get a credit card with an interest late that is lower than 14% is you don't have one already. If all of your current credit cards have interest rates higher than that, then cut up all of them except for one and then get another card with a low interest rate. After you've done that, then figure out what all of your minimum monthly payments cost for all of your credit cards. If after adding all of them up you realize that you could be paying more on those cards, then do it. Even a card with only $1000 dollars on it can takes years and double the money to pay it off if you only pay the minimum payment. If you have extra money to use to pay off your credit cards, start with your cards that have the highest interest rates and pay them off first.
If after examining all of these things and you decide that you really are going to work hard to pay off your debt, go to a financial institution that offers balance transfers at really low interest rates. Most financial institutions offer special promotions with really love interest rates for the first year. Some of these interest rates can be between 1% and 3% for the first year. Transfer your debt from one of your high interest rate cards to this, and then pay it off completely within the first year. This way, you are basically just paying off the actual amount you borrowed, and not paying high amounts of interest along the way. But beware of missing payments because most places will bring your interest rates up sky high if you miss even one monthly payment. This type of debt consolidation is for the serious person who wants to get out of debt fast.
If all else seems hopeless, consider using your savings to get your out of debt. Although this is usually a complete last resort for most people, it's better to pay off your debt now then have to continue paying extra interest payments that end up doubling whatever you borrowed in the first place. Once you get completely out of debt, you can begin saving money again and get back on track. Until you get out of debt, however, you will continue to pay massive amounts of interest to your loaners until it all seems too hopeless to finish.
The best way to stay out of debt or avoid it all together is to live under your means. If you cannot afford that new house, new car, or new plasma television at the time, then don't buy it. Don't let debt companies suck you in thinking that you'll just be able to pay it off as soon as possible. Life is not predictable and you may end up losing you job or getting a large medical bill during the time you need to pay off that credit card. Live a lifestyle that suits your current situation and try to save a little extra out of every paycheck. If you save a little extra, then you will eventually be able to own that plasma television and be able to pay for it straight across without any strings attached.
If you feel as though things are hopeless as far as getting out of debt goes, it might be valuable to speak with an actual debt consolidator. They are professionals that can examine your specific situation and do their best to help you get out of debt. It is possible to change the debt pattern around, so begin today by paying off your debts.
It's a fact that debt is a huge problem here in America. The American financial system actually relies on people being in debt in order to function. If you want to buy a house, you either have to go into debt or pay upfront in cash. If you want to buy any large purchase, the company automatically checks your credit score, a score awarded to you for successfully being in debt. The problem that lies in the system is that many people take advantage of credit and end up putting themselves in positions of what seem like paths with no return. However financially messed up you may feel, there is a way to relieve some of that pressure and get back on track to getting out of debt. Debt consolidation can help you do those things.
Obviously the first step to financial freedom is to sit down and evaluate how much money you owe in total and to which places you owe it. If you happen to have debt with many different credit and loan organizations, figure out which places are charging you the most in interest rates and list them from the highest to the lowest. The credit cards with the highest interest rates are the ones you are going to want to pay of first because they are costing you the most money out of pocket.
Next, cut down your credit card resources. Keep the two credit cards that offer the lowest interest rates, and then cut up and throw away the rest of them. Before you completely close the account of the other credit cards, be sure to check with the institution for their policies. Pay off those high interest cards first and then completely close the accounts with them. Cutting up the cards and paying them off allows you no excuse and no way to fall back on those tempting cards.
Another helpful tip is to get a credit card with an interest late that is lower than 14% is you don't have one already. If all of your current credit cards have interest rates higher than that, then cut up all of them except for one and then get another card with a low interest rate. After you've done that, then figure out what all of your minimum monthly payments cost for all of your credit cards. If after adding all of them up you realize that you could be paying more on those cards, then do it. Even a card with only $1000 dollars on it can takes years and double the money to pay it off if you only pay the minimum payment. If you have extra money to use to pay off your credit cards, start with your cards that have the highest interest rates and pay them off first.
If after examining all of these things and you decide that you really are going to work hard to pay off your debt, go to a financial institution that offers balance transfers at really low interest rates. Most financial institutions offer special promotions with really love interest rates for the first year. Some of these interest rates can be between 1% and 3% for the first year. Transfer your debt from one of your high interest rate cards to this, and then pay it off completely within the first year. This way, you are basically just paying off the actual amount you borrowed, and not paying high amounts of interest along the way. But beware of missing payments because most places will bring your interest rates up sky high if you miss even one monthly payment. This type of debt consolidation is for the serious person who wants to get out of debt fast.
If all else seems hopeless, consider using your savings to get your out of debt. Although this is usually a complete last resort for most people, it's better to pay off your debt now then have to continue paying extra interest payments that end up doubling whatever you borrowed in the first place. Once you get completely out of debt, you can begin saving money again and get back on track. Until you get out of debt, however, you will continue to pay massive amounts of interest to your loaners until it all seems too hopeless to finish.
The best way to stay out of debt or avoid it all together is to live under your means. If you cannot afford that new house, new car, or new plasma television at the time, then don't buy it. Don't let debt companies suck you in thinking that you'll just be able to pay it off as soon as possible. Life is not predictable and you may end up losing you job or getting a large medical bill during the time you need to pay off that credit card. Live a lifestyle that suits your current situation and try to save a little extra out of every paycheck. If you save a little extra, then you will eventually be able to own that plasma television and be able to pay for it straight across without any strings attached.
If you feel as though things are hopeless as far as getting out of debt goes, it might be valuable to speak with an actual debt consolidator. They are professionals that can examine your specific situation and do their best to help you get out of debt. It is possible to change the debt pattern around, so begin today by paying off your debts.
Art Gib
DebtGuru.com (http://www.debtguru.com) can help you with your debt consolidation. Billings Farnsworth is a freelance writer.
View all articles by Art Gib