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FINANCE
Debt-Relief
Getting Out of Debt
By Lynn Doxon |
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Debt-Relief
Debt, in most American homes, is a way of life. The
most common way to pay for things is with a credit
card. 43% of households spend more than they earn.
The average household has $8000 in credit card debt,
although many have much more than that. With
interest rates rising, that trend may be forced to
come to an abrupt halt.
The first step in reducing debt is to get spending
under control. Do not carry credit cards. Switch to
a debit card and leave the credit cards at home, or
better yet, cut them up. When you cut them up write
a letter to the credit card company requesting that
they cancel the card. Send a copy of that letter to
the major credit reporting companies.
Next start paying off the debts you have. List them
either in order of smallest to largest balance or
highest to lowest interest rate. Determine the
maximum amount you can pay on the debts monthly. Of
course, this has to be more than the total minimum
payment on all the credit cards. Make the minimum
payments on all the cards except the first on the
list. Pay as much as possible on that one. Continue
paying as much as you can each month until it is
paid off. Then do not reduce the amount you are
paying on credit cards. Simply add the amount you
were paying on the first card to the amount you were
paying on the second card, and continue paying that
total amount each month until the second card is
paid off. Then add the amount you were paying there
to payments on the third card. Continue this process
until all cards are paid off.
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