How to Lower Your Debt

Debt – whether it’s a signature loans, credit cards or auto loans, no one likes to admit it but we all have it in some form. It can really wear on your peace of mind at times, trying to keep up with what payment is due when and which payments come out of which paycheck. Well, let’s talk about something we would all appreciate — Getting rid of it!

Stop the madness. The first step to paying off debt is to stop obtaining new debt! This will require a lifestyle change in some ways. Cut back on eating out and as alternative, plan meals at home that will allow you to take leftovers for lunch. Make a monthly budget, use grocery lists, and stick to them both. If an emergency arises try to find a way to pay it besides putting it on the credit cards. Try to cut back on the cable bill by eliminating some channels or stop your gym membership and workout at home, instead. It takes some self control but it is worth it to get out of debt!

Beat the minimum payment battle. When the credit card company gives you the minimum payment amount each month, they don’t explain that you are pretty much just covering the interest accumulated from the previous payment. Trick them at their own game and double up on that amount. Look at your monthly expenses and find ways to cut back on things to gain the extra money for these payments.

Snowball debt payments. Write down the balance, the interest rates, and the monthly payment amount of each credit card. Also, take note on any cards you have not reached your limit on and have the lowest interest rate. You can check into transferring all or part of a balance from a higher interest rate card to this card (be aware there may be a balance transfer fee charge). If you don’t have any room to make a transfer, start doubling up the payments on the higher interest rate cards and pay the minimum payments on the lower interest rate cards. When a high interest rate card’s balance is low enough to transfer to a low interest rate card, do so. Once you pay a card off, start applying that monthly payment amount to the next highest interest rate card.

Let’s talk peace of mind.We all know that Credit Unions are the way to go when it comes to finances but did you know that they offer some of the lowest interest rate credit cards out there? You can get as low as 9.9% and a credit line up to 15K. They may not offer rewards like some others but have some pretty awesome benefits, like cash advances at the same base interest rate instead of a higher rate. And at FTWCCU, all balance transfers are done free!

I know sometimes it seems hopeless but never lose focus. With a little self control you can make a plan and get to the place we all want to be – debt free! Once you reach that goal, you will have the skills to maintain a debt free lifestyle.