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Pay Off Your Debts Slowly But Steadily, Or Remove Them Now?

Apr 14, 2008
Many Americans have succumbed to the endless offers of easy credit that have been thrust upon us over the last decade. Now we are starting to get that 'morning after' feeling that the easy credit party may not have been such a good idea after all. And we may now face a hangover of huge personal debt problems.

Regular credit card debts combined with store cards, car payments and any other, of the numerous types of lending that were available have now plunged many of us into a very tricky debt situation.

At a time like this, it can be difficult to know where to begin the clearing of your debt situation. You could of course, just leave things as they are, but then, if things start to become worse as everybody in the financial world, believes they will. What will be your situation should interest rates rise, and your income does not?

An ever increasing burden of debt is the not only financially but also emotionally stressful and cause untold misery to people who find themselves in a bad debt situation.

You should consider taking action now to avoid the problem getting worse. Where your credit score possibly falls, through late payments or other financial problems. Dealing with situation immediately is a good bet to avoid future serious problems.

Credit cards form the largest part of many Americans non mortgage debts. Credit cards also have perhaps the highest interest rates that you are probably paying right now. Easy access to credit card funds can be so convenient, but they also can cause tremendous debt hardship.

One way to deal with this is to start to pay off your credit cards, one by one. The best place to start work is usually the card with the highest outstanding balance. You should endeavor to pay as much as possible off this card each month until you can get it down to a zero balance. With all your other cards, you should maintain at least the minimum monthly payment.

Once you have managed to reduce that first card down to a nil balance. Then start on the second highest balance card, and so on. You must of course avoid using your cards to increase your current debt. Only keep one card with you for genuine emergency problems, not just when you are a little short of cash that day.

The strategy will work extremely well in removing, not just your credit cards but all your other outstanding debts. The big problem with this type of debt killing is that it takes a considerable amount of time. It may take several years to pay off every one of your cards and other debts.

Although this is probably the best way to deal with your outstanding balances. It can psychologically, the incredibly demanding to commit yourself to many months or even years of debt clearing. Which can be soul destroying and you will have plenty of time to fall by the wayside during years of financial commitment.

Another good idea is to reduce your outgoings, wherever possible, things like cutting back on your cable TV bill, entertainment, eating in restaurants, weekends away, can drastically reduce the amount of outgoings that you have each month.

The problem is that psychologically, and to an extent financially, this feels like putting a band aid on a gaping wound. Committing to years of frugal living in order to remove your debt can be practical and in the end provide excellent results. Actually living like that can be incredibly difficult for most Americans.

A better solution may be to remove all of your debts with one action. A debt consolidation loan can be an ideal alternative for many American families. Many people believe that the type of loan just adds another debt to an already long list that they have.

This is because a lot of people do not understand just what a debt consolidation loan is, and what it can do for them. A debt consolidation loan works like a type of second mortgage, this loan is secured against your property. Like a mortgage, it carries a low interest rate and is paid off of over a long period of years.

The intention of this type of loan is to pay off every single other debt that you have. That way you are left with just one single loan at a low interest with low monthly payments that will probably be less than half of the total you are paying now.

Therefore, a debt consolidation loan removes all your existing debts and replaces them with one low interest loan that has very low monthly payments.

This can eliminate all those years of saving and paying off your cards and car payments in a slow but sure fashion. This type of loan is the solution than many Americans are looking for. They are easily set up by a professional online broker, who can guide you through each of the reasonably simple steps, to securing a loan from a quality financial institution.
About the Author
Joe Kenny writes for TFGI.com, visit them today for free debt help or Rebuild.org for debt relief and to consolidate debts.
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