When it comes to getting out of debt as a New Year’s resolution, there are several ways to get started. Americans want to pay down their credit card debt in 2010; unfortunately, most people do not know where to begin or how to get started. If you find yourself struggling with credit card, but want to get out of debt consider the following from IAPDA certified Debt Arbitrator Alan Barnes.
Figure out exactly how much extra money you can put towards your highest interest rate credit card debt and begin to make that payment monthly instead of just paying the minimum credit card payment.
- Continue to pay the minimum on your other debts until the one with the highest interest rate is paid off.
- After one debt is paid off, pay may begin to pay down the debt with the next highest interest rate and continue this process until you get out of debt.
- It is very important during this process to stop using credit cards and go to a strictly cash based system until you are out of debt.
- Once debt free, it is also a good idea to close all credit card accounts except one card — use that card as your only card and try to use it for emergencies only and make sure to pay it off monthly.
Or you might consider this option too.
- Get all your credit card debts together and place them in order from smallest to largest. Then, begin to pay down your smallest debt first. By using this method, you may feel like you are getting more accomplished when getting out of debt and keep you motivated in the process.
- Continue to pay the minimum on your other credit card debts as you normally would. This will help keep your credit rating intact while you get out of debt and strengthen your financial situation.
- After one debt is paid off, pay of the next smallest and continue the process. This will help you achieve debt freedom in a more efficient manner that just making minimum payments.
- While working on the other credit card debts, stop using credit cards and go to a pay by cash system until you get out of debt or you are sure to run into other problems that will prolong the process.
- Once you get out of debt, remember to close all accounts except for the one as mentioned earlier — use that card as your only credit card and only spend what you can afford to pay off monthly.
Thanks for the hepful tips on how to get out of debt. We have struggled for years and think some of the ideas discussed could really help. If they don’t, we will then have to consider other options such as debt settlement or debt consolidation. Keep up the good work on the site. I am sure other will benefit from is as well.