Control debt and shift spending to help eliminate debt.
Eliminate personal debt in these steps
Reduce, pay off, and eliminate personal debt by controlling and shifting not only spending, but debt as well. One of the best ways to eliminate debt in one’s financial picture is to stop spending on credit cards immediately and shift to using debit cards, writing checks against a checking account, and simply paying with cash. Many argue that the automatic spending record created through use of a credit card makes them a valuable resource. Quite the contrary. By continuing to rely on credit cards for one’s purchases, the risk remains to use those cards beyond one’s means and continue to revolve balances from month to month. Furthermore, benefits like rewards programs are being scaled back. Debit cards are an excellent option because they deduct from funds that you already have, yet create a record of the purchase much like that which is found in a credit card statement. Reaching for the checkbook and paying with cash are healthy alternatives to the debit card.
Understand interest rates and look for lower ones
Eliminate personal debt by increasing your familiarity with basic concepts in personal finance like interest rates. Interest rates are often termed “annual percentage rates”, which is the annualized rate of interest charged, allowing for periodic charges to debt that can vary from one day to a full year and more. On credit cards, they can be variable rate cards, which change based on the prime rate and the base rate of a credit card issuer, or fixed rate cards. Understand that interest rates can change based on a number of factors in one’s credit card contract, including missed payments, late payments, and exceeding one’s credit limit. They tend to leap high at the end of grace periods for introductory interest rates and when transferred balances exit from their zero percent introductory periods. But your best bet for reducing rates is to call the issuer and negotiate a lower rate . To this end, ask them for the base plus prime interest rate at the company, or even better, tell them about any zero percent balance transfers that you can secure, and explain to them your clear zero percent alternative to continuing to hold the balance of debt with them. In short, find a credit card that aids your debt elimination process, and don’t be afraid to cancel a credit card if the situation truly merits such action.
Use a pay down system for debt reduction planning, tracking, and management
Identifying a debt management tool that also has a holistic view of one’s debt status and that provides dynamic information to quickly help eliminate debt is key. The DebtGoal tool has all of these features, plus straightforward optional actions to accelerate one out of debt even faster.
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs. DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.
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