How To Get Out Of Debt

It happens to us all. For many individuals it 's easy to get caught up in the credit card hysteria. The percentage of the population that is in debt is growing at an exceptional pace.

If you're looking for an easy way out, however, don't bother reading on. If you've got over your head in credit card debt and would like to know how to get out of debt, we will show you. Those emotional purchases can add up, and before we know it we've got a problem on our hands.

We see things we like and buy them, on our credit cards of course.

If you have been thinking to yourself, how to get out of debt, it 's important to understand that it 's no easy or simple task. It was certainly easy to spend the money, but paying it back is not so much fun. You need to start by cutting back on your spending.

It sounds simple, but this is an important step in getting out of debt. The surpluses that come from lower spending should be allocated towards paying off your credit cards. Though it is important to set aside a small fund for emergencies. Emergencies are inevitable; they will happen.

We typically reach for our credit cards in these circumstances. That way you can focus on how to get out of debt, rather than how to not add to it. With savings, however, you'll be prepared. It 's important that you're disciplined, only utilizing these funds in extreme emergencies.

It 's easy to just make the minimum balance payments, but this barely keeps you even. This assumes you don't spend any money on your credit cards, which isn't always realistic. It 's important that you stop your credit card spending.

This is one of the best ways on how to get out of debt. Stop adding to the problem. Also, you'll be a little more frugal when you're spending your cash. It doesn't always seem like your own money when you spend with plastic.

It 's important to understand that there is no easy way out. Debt negotiation services are not necessarily the answer. They're out to get paid. They may settle your debt, but will do so at a cost. The cost being your credit and excessive fees. It may involve hard work and focus, however, you will get things paid off over time.

Refinancing is a common instrument utilized to remove debt, but it is not at all the solution. By refinancing your credit card debt 's you're just playing a shell game, moving your debts from one location to another. For many individuals that got caught up in this during the housing bubble are way above their heads.

As a result, bankruptcy, foreclosure, and IRS issues are now the problem. When you evaluate the two in hindsight, simple debt issues are a breeze to deal with. So, don't get your self over your head by looking for the easy way out.

It 's paramount not to get carried away looking for the easiest way out. By no means is getting out of debt easy. It takes time and some elbow grease. But, bankruptcy and all the other bad things that can happen are much more severe, and goes to show how bad things can get. The morale of the story here is that there is no magic bullet, no easy solution, and your debt problem will not solve itself.

You've got to take it into your own hands and make it happen, even if it takes the sacrifice you're unaccustomed to. So, make an effort, you will be satisfied that you did.

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Bury The Debt Monster: Part Two

You will however, start feeling an enormous weight lifting off your shoulders as you start creating a plan to take over the debt monster once and for all- so let?s get started! You probably had some fun getting into debt, and took your time building that massive portfolio of outstanding accounts; unfortunately, getting out of debt isn?t as enjoyable! Now that you?ve taken inventory of all the debt you currently have, it?s time to do something about the amount of bad debt you have.

Lesson Two: Credit Card Debt Elimination

Easing debt anxiety is just around the corner, so close that the debt monster is groaning in despair!

Pull out your ?bad? debt list from Lesson One. It?s time to play with the credit card companies!

Lower Interest if You Please


One by one, call each of your credit card issuers and try to get them to lower your interest payment. People who have a track record of making their payments on time in the past will have a higher success rate at this task, but it never hurts to try and you may be surprised at how much you can save just by asking!

Here is what you could say when you call your credit card accounts:

You: I just received a credit card offer in the mail that says I could transfer my balances for 5% interest. Your service has been really good and I don?t want to switch credit cards, but even though I?ve been using this card for 4 years, I?m still paying 18% interest. I?m really going to have to switch cards to save some money unless you decide to lower my interest rate.

Credit card company will give you some mumbo jumbo about your rate being the going rate, and maybe put you on hold for awhile as they check over your payment history. When they?re ready to talk to you again, you could follow up with something like this:

You: It may be a reasonable rate, or 18% may be the going rate, but since this other credit card is offering me 5.9%, I?m going to pay a whole lot less by transferring my balance to them. I need you to reduce my interest rate to at least 10%.

The credit card company will probably put you on hold while the representative checks with their supervisor or whoever is in charge in the mysterious and mystical world of credit card companies, behind the scenes. They just may come back and say they can lower it to 12% or some other number that?s higher than you requested but lower than what you had been paying. Accept the new rate and celebrate (but don?t spend very much on your celebration or you?ve wasted your time!)

Developing Your Plan of Attack


You can?t expect to bury the debt monster without a solid plan of action as it?s a very strong creature that steals from the Terminator?s famous line, ?I?ll be back?; and back the debt will definitely be if you don?t have a plan.

The reason why it is better to pay off higher interest accounts first is because less of your payment is going towards the principal amount owed. This is the order in which the accounts should be paid off, generally. On a new sheet of paper or in a new spreadsheet, rewrite the list so that the accounts that have the highest interest rate are on the top of the list, with the lower interest accounts at the bottom.