Tips to Get Out of Debt

The country's current financial crisis has resulted in more and more households getting buried in a landslide of debt. If you find yourself facing a financial disaster, follow these tips to get out of the red.


1: Cut up all your credit cards.
If you can't be trusted to not use your credit cards, cut them up.

2: Always try to make more than the minimum payment.
Think about this: $9,000 in credit card debt can take you 32 years to pay off and cost you $22,000 in interest if you pay just the minimum payment. Try to pay three times your minimum amount until it's paid off. Then put that amount of money toward your next priority.

3: Make larger payments on the bills with higher interest rates first.

[AD]4: Honor all your debt as equal. It's never OK not to pay something.
If you want a bill to go away, you need to pay it, plain and simple.

5: Learn everything there is to know about your debt.
Read the fine print. You need to be clear on things like interest rates and fees. If you think an interest rate is too high, call up your creditor and negotiate. Often, credit card companies will lower your rate on the spot.

 

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for more tips from personal finance expert Amelia Warren Tyagi.