Get Out Of Debt Tips


Getting Rid of Credit Card Debt

Now this is the section that I’m sure everyone will have their eyes glued to. Getting rid of credit card debt is one of the most sought-after accomplishments of any individual in today’s society. Luckily there are a lot of options for people to get rid of their debt. The tried a true method that works every time is to simply pay them off as soon as possible.

1.    Make Cut Backs To Increase Income

You’ve got to pay off the debt, that’s just how it goes. But, as you may have read earlier, just paying the minimum payment is pretty useless. If the minimum is all you seem to be able to afford, consider making some cut backs in your life until your debt is clear. You can do the following:

  • Take public transit or ride a bike to work
  • Cancel your cable/telephone/internet service. Just keep what you absolutely need. (Select the lowest speed internet and limit yourself to 1 cell phone for example.)
  • Stop being picky about your brand of food. Debt is quite a bit more serious than your morning breakfast cereal preference; get the cheapest!
  • Learn to drink water. If you’re in the U.S. you have no excuse not to drink tap water. You can save thousands on drinks every year by drinking tap water or even making drinks like tea, coffee and drink mix (koolaid).
  • Cut your Utilities Down. Use evaporative coolers in the summer and blankets in the winter. AC’s and Heaters really drive up electricity costs.

2.    Try Snowball Payments

The primary way of getting past your credit card debt is to pay off your smallest balances first so. If you have a $1000 credit card to pay for an a $3000 card as well, pay off the $1000 first so that you can get it out of the way and use the money you were paying on it for the next one. Work up from smallest to largest until all of your debts are paid off. This is the best thing to do because it ultimately keeps your costs down.

Let’s say you go the opposite and pay off your high-dollar debts first. It will take you substantially longer to pay off a $10,000 debt than a $1,000 debt. By the time you actually pay off the $10,000 debt the $1,000 may be almost the same amount! The $1,000 debt can be paid of fairly quickly and by the time your down with it, the larger debt has not increased nearly as drastically. Instead of having a net cost of around $20,000 to pay off all your debts you will have closer to a $13,000 cost (depending on interest rates, these are just examples).

3.    Snowflake Payments

This sounds similar but is somewhat different than the previous method. Making snowflake payments means that you pay small amounts of money whenever you have a little extra. These could be ridiculously small payments like $1.45 or $7.34. If you do this whenever you find/have a little extra money you’ll find that they add up faster than you’d think. You’re not going to pay off an entire debt with snowflake payments but you could significantly reduce the time it takes to pay the debt off.

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