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SolveYourProblem.com
Article Series: Debt Relief & Debt Consolidation
I Want To Get
Rid Of My Debt...NOW!
Pay Debt
Back Strategically
When you’re paying back debts, a little
strategy can make a difference of hundreds or even thousands
of dollars.
The best strategy is simple, but effective.
List Your Debts.
Write down a list of every debt you have, how much it is,
and what the interest rate is. You might have trouble finding
this information, but it’s worth getting it all together in
one place and writing it down. You can’t manage your situation
strategically if you don’t even know it, can you?
Remember to include your credit cards (with the different
rates and balances for purchases and cash advances), other
cards, loans, mortgages, and even money you’ve borrowed from
friends and family. Every bit of debt counts, and you’re trying
to get it down to absolute zero.
Bad Debts and Good Debts.
Go through your debts and mark them ‘good’ or ‘bad’. You might
think this is odd, but some kinds of debt are nowhere near
as bad as others. A mortgage, for example, is an investment
in a house, paid over a fixed term – there’s no real risk of
paying a ridiculous amount of interest or never getting it
paid off, like you could with a credit card.
Good debts: mortgages, student loans, car loans.
Bad debts: credit cards, store cards.
As a rule, good debts are for a fixed amount of time and allow
you to buy something valuable that you cannot afford, while
bad debts are ‘revolving’ and are just used instead of cash.
Time to Prioritize.
Cross your good debts off your list, for now – you shouldn’t
think about paying them off more quickly until you’ve got all
your bad debts out of the way.
Now, arrange your debts in order of interest rate, with the
highest interest rate at the top. The chances are that the
debt at the top will be a store card or credit card, which
could have a really huge interest rate. Try to transfer as
much money as you can from the high-interest cards down the
list to the lower-interest ones.
Once you’ve done that, focus all your energy on repaying the
new top debt. Pay the minimum on everything else, and throw
as much money as you can find at the problem. If you have any
non-essential monthly commitments, consider cancelling them
for a while, and putting that money towards your payments.
Stop saving, just for a while. Try keeping track of where your
money goes, just for a month – you might find that you’re spending
loads on something you don’t even want or need.
Do your
best to give up any expensive habits you might have. You’ll be shocked how fast your debts can go down if you put
the money you’d usually spent on smoking, drinking or gambling
towards them! I’m not trying to spoil your fun here. You’re
just making some small sacrifices for a while, and your life
will be so much better for it in the long run.
You have to be aggressive against that top debt, and determined
to defeat it. This is a war, you’re on the attack, and you
want to win against your debt. Don’t you?
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by SolveYourProblem.com
: 2006
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