Don't know how to pay off your debts? Here are some simple steps you can take to get the best results in the least amount of time.
Incurring debt is easy, but managing debt is not. To do this, you need to be good with money and know how to get out of debt. All counsellors agree that using debit cards is a good solution. When you do that, you can only spend as much as you have in your bank account. If you stick to your goal, you won't have to think about going into more debt.
The second, and somewhat easier, thing you can do is to get rid of some of your credit cards. With a pair of scissors, you can cut each of your credit cards individually. You can always keep one credit card for emergencies only. This should be the credit card with the lowest interest rate. By getting a debit card and cutting down on the number of credit cards you have, you will spend less money on unnecessary things. Then, you will have more money to pay off your debts.
The third step is to move all the balances from your old credit cards to the one you kept. When you do this, the interest on all of your payments goes down. Some credit card companies charge up to 21 percent in fees. You might want to think about transferring all of your balance to a card company that lets you do that for free. This will cut down on the amount of interest you have to pay on your existing debt.
People who owe money but own a home can get a home equity loan or open a new line of credit. Getting a loan like this has two good points. The first is that the interest rates on this loan are much lower than those on credit cards. The second is that you only have to make one payment to the bank each month. There is no worry about late fees, not paying on time, or being bothered by debt collectors.
Another option is to get a loan to pay off all of your debts at once. You can get this from banks, credit unions, and other financial institutions. The debt consolidation loan works like a mortgage and gives you the breathing room you need to get out of debt.
People who owe money but don't want to get a loan could sell "unnecessary" things they have around the house. These may include jewellery, antiques, furniture etc. This will bring in money that can be used to pay off the debt. Debtors can even use small amounts from a savings account with low interest to pay off debt. All of these ways lead to the same goal: getting rid of high-interest debt and putting it all in one place so you can deal with it all at once. If you only go after one source of debt at a time, you might be able to win the battle more easily.
