Posts Tagged ‘debt’
Guide to Getting Out of Debt
Posted by: admin in Useful Financial Advice on April 30th, 2009
Ignoring debt won’t make it disappear. Interest rates are compounding at the rate of 20% per month, every month. Wishing won’t make it go away, but you can start to make a dent in it by following one or more of the steps given here. Read a little further to find out more.
Pay more than the minimum, always! Usually the minimum is two or three percent of the balance, and only paying enough to get by is what the banks want. The longer you take to pay a debt, the more interest they squeeze out of you. The best thing to do is to pay as much as you can afford, and if that amount is twice the minimum, then that’s great. Paying more than the minimum might require a little sacrifice, but it will be worth it in the end.
When you’re examining all your credit cards, look at the one with the lowest rate. If you haven’t maxed it out, consider transferring a high-interest balance to that card. If the balance is too big to fit on one card, try to pay the minimum on all your cards but one. Concentrate on paying THAT one off, then work your way on to the next one. This way is sometimes called “snowballing”.
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Simple Tips for Pulling Yourself Out of Debt
Posted by: admin in Useful Financial Advice on April 13th, 2009
When confronted with debt, sometimes “just paying it off†isn’t as easy as it sounds. Unfortunately, your debt won’t disappear overnight, nor will it help you to ignore your obligations. However, with perseverance and determination, you will pay off your debt. To get started, here are a few tips.
#1: Learn to Snowball
One of the best debt elimination techniques is the snowball method. Basically, start by examining the balances and interest rates on your credit cards. Find the card with the highest rate and focus/divert your resources to paying down that card while making the minimum payments on the others. Once this card is finished, move on to the one with the second-highest rate and so on. You’ll find that as your debts decrease, the amount of money you have to tackle remaining debt increases.
Another way to snowball your debt is to transfer your balances to a low-interest card. In some cases, look for banks offering promotional transfer rates that can substantially reduce your monthly payments for a brief time and allow you to hit the principal hard. Watch out though, at the end of the promotion the new rate may be applied retroactively to all outstanding balances!
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