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Some Tips To Help Bring Down Your Debts

Jun 5, 2008
There are many ways to help with a bad debt situation. We have tried to give you some pointers some of which you will find useful; some may not be suitable for you personally.

You do need to select any ideas that can help alleviate any current debt problems you may be having. It is better to deal with the situation now rather than wait until you can no longer cope.

This in the end is almost certain to be what will happen, as our nation's debt crisis seems to deepen week by week. One debt problem that you should certainly consider dealing with is credit cards. Plastic debt makes up a huge percentage of personal debt in the USA.

That is hardly surprising when you consider just how easy it is to obtain a card, and how simple it is to run up increasing balances on multiple credit cards.

You should certainly consider removing credit cards from your debt situation by cutting them up. This may seem drastic but the high interest rates charged by card companies can be crippling on your monthly budget.

Cutting up all but one of your cards is an incredibly useful way of controlling your spending and thus reducing your total debt. Getting rid of all but one of your cards, which you can use for emergencies, is an excellent way to deal with them.

You can then start to pay off each card one by one. By making the maximum possible payment, you can each month to the same card, until it has a zero balance.

You should not consider cancelling your credit cards, as this will have on adverse effect on your credit history. However, putting them out of reach is always a good option for debt reduction.

You should never be late with a card payment as this invites additional fees to be added to your account. There are other fees associated with credit cards that are best avoided. ATM cash machines can involve high fees, especially if you are travelling outside the country.

It is better to withdraw cash from your local bank, equivalent to what you need for the entire week and use that instead of your credit card. This will also help you in reducing the amount of money you spend on items such as groceries or impulse purchases. You should avoid convenience credit that will include fees such as booking your movie tickets on line. These types of payments attract added charges.

If you have several credit cards you should seriously consider using balance transfers to drastically reduce the amount of interest you are paying. You may also wish to contact each credit card company individually and ask them to reduce the amount of interest that you are paying. Otherwise, you may have to transfer the balance to a lower interest rate card. This will often produce positive results from the card company, as they would rather receive less interest, than lose you to another credit provider.

Setting a budget limits for yourself each month is a wonderful tool for controlling and reducing your debts. You should work out exactly how much your monthly outgoings are, including all of your bills and credit payments.

Then calculate how much actual cash you have coming in to the house each month. Any difference between the actual outgoings and income should be used in paying off one of your debts.

This needs to be continued until you have balanced your debts. Even though this could take many months, and even years to complete. The alternative is slipping further to debt until the situation becomes totally out of control and leaving you with few options for eradicating your debts. It may be an unfortunate fact that you may simply not be able to pay off your debts in a reasonable amount of time.

The other alternative is to approach this from the opposite angle. This means that you will need to obtain additional income, perhaps from overtime, or a part-time job, to boost the amount of cash coming in to the house each month.

Not only will additional work hours give you more available money. It will also reduce the amount of time that you have available to spend this additional cash, this in turn will help reduce your debt balance.

If, even this kind of action is not sufficient to resolve your financial problems. You may need to take more drastic action, such as moving home to a smaller house, or possibly two another State. These are serious alternatives, but they may be your only choice should situation get completely out of your control.

Slightly less drastic, and possibly the best solution for many people is a debt consolidation loan. This type of loan will pay off all of your existing debts, including credit cards and any other outstanding financial problems that you have.

All these debts will then be replaced by one single, while monthly payment, that can be as much as 50 or 60% lower than what you are paying to your high interest debts at the moment. These loans are reasonably easy to arrange through an online broker, who will be able to guide you through the process, and perhaps give you a new financial start in life.
About the Author
Joe Kenny writes for TFGI.com, visit them today for debt help or Rebuild.org for debt relief and to debt consolidation loans.
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