Five Steps To Debt Reduction
If you're like most people, you want to get out of debt
now... not tomorrow or two years from now. Because your Visa card is charging
you anywhere from 9 to 19% APR, you probably wish you could be out of
debt starting yesterday. It's understandable.
If your debt is not completely insurmountable, and you don't require
the help of an outside agency like Credit Card Debt Consolidators, you
may be able to help yourself... starting today.
Want to make a great start to dramatically reducing your debt in the
next 24 hours? Try these five steps.
Step 1: Do You Need Multiple Credit Cards?
The problem most clients we take on have is that they carry alot more
than one credit card, and often only carry small balances on many of them.
The goal here should be to identify the easiest card to pay off - and
pay it off. For the next 3 to 6 months, put all your extra debt-busting
cash toward paying down that single card. The resulting feeling from eliminating
that single debt will give you a sense of accomplishment - and the momentum
you need to perhaps pay down your second smallest card balance, and third
Step 2: Plan To Succeed
Last year, the average American household with
at least one credit card carried an average of about $8,000 in credit-card
debt. How quickly could the Average American eliminate that balance? How
quickly could you or I? You won't know until you have a plan of action.
Understanding the inside and outs of your debts is critical here. Which
one carries the largest balance, which has the highest APR, etc. Then
decide, using your budget, how quickly you would like to pay it all back.
Set a feasible time goal, of say, 18 months, and stick to it at all costs.
Step 3: Don't Just Talk The Talk
Many people tell themselves and others that they are ready to get themselves
out of debt, and are brimming with optimism about the challenge. The question
is, are you actually doing anything, or simply talking about it. Some
people find themselves providing excuses in the short term, reasoning
that they "can always cut back" or will "pay down a larger
part of the debt next month". The problem is, next month often never
happens. Walking the walk of debt reduction means you develop a plan,
work on it and stay on it for the length of that plan. Our experience
tells us that no deviations from that plan equals no debt.
Another concept foreign to many Americans in this credit-heavy world:
If you can't afford it with cash, don't buy it! Sticking to this will
definitely ensure your debt will be eliminated sooner than later.
Step 4: Talk to your Creditors Directly
Rather than pay high credit-card interest rates -- which will keep you
in debt indefinitely -- it is often possible to reduce your debt by calling
your credit-card companies today, telling them that youre planning
to move your money to another company with a lower rate, and then let
them woo you back with lower rates. Because most customer service people
are authorized to lower your rates to stave off defection, you may be
able to get a rate reduction.
Step 5 Consider Professional Help
It's a fact: most clients who come to us have modest amounts of debt that
never seem to decrease, despite the measures they may take. Some of our
clients are also referred by banks because they have difficulties getting
Services like Credit
Card Debt Consolidators or Debt Management Advisors are often the
best choice for consumers. The advantage of these services goes beyond
the organizational helping hand they extend. Often, making only one payment
can save you hundreds of dollars over the life of your debt.
Although these steps may seem simple, they can be incredibly
effective in the long run. But the best step of all: stop spending. Especially
on things you can't afford with cash.
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