Top 10 Ways To Get Out Of Debt
If you don’t address your debt problems, they will soon snowball out of control
and before you know it, letters will be arriving from your bank and credit card
companies. But it’s not too late to fight back. With time and effort you will get
through it but it’s important to stay calm and focused and above all be totally
honest about the position you are in.
You need to realise that you have an issue and exactly how much you owe. Don’t bury
your head in the sand any longer and face up to the fact that some serious changes
are going to have to be made if you are to come out of your debt. Saving money is a great way to avoid debt, using online coupon sites like, coupons by answers.com
you can save some serious cash.
You need to change your mindset and approach to spending from now on. You have a
job to do and that is to get out of debt.
- If you have more than one debt then start by putting your debt into priority order.
Look at you mortgage or rent expenses first and if you are struggling to pay them
or other essentials such as utilities then these shortfalls must be given urgent
attention. For other debts such as credit cards, loans or store cards, rank these
in order of the highest interest rate first.
- It is important that you draw up a budget plan which will highlight how much money
you have left at the end of each month to go towards your debt repayment. Noting
down details of what you spend will enable you to identify where cut backs can be
made so that you can
reduce your expenditure
or make sacrifices which will help control your future spending. If you have savings
sitting in the bank then it is worth considering
paying off you debts with your savings.
- Consider switching to a cheaper interest credit card. Take advantage of the many
0% balance transfer offers to provide you with some breathing space. Be careful
as some transfers incur a fee which is often a percentage of the balance being transferred.
Others have a limited time for the 0%. Shop around to get the best deal for your
- You should be aiming to stop using your card altogether until the debt is cleared.
However, if this is not possible, pick a credit card which has a 0% introductory
rate for purchases so that you are adding to your debt problems. But don’t use this
as in excuse to start spending again.
- Cut up your old credit cards that you no longer need – so you are not tempted to
start using them. Cut up store cards too and write or call the card companies to
cancel your account. They will re-issue the card when it expires if you don’t let
them know that you no longer need the card.
- The sooner you can repay your debt, the less they will cost you so speed up those
repayments if you can. The minimum payment on you credit card may be tempting but
it will cost you dear in the long run. If the interest is mounting up, it will take
forever to get your finances straight. Remember that if you pay off a loan early
there may be penalties.
- If you are on your lender’s standard variable rate for your mortgage, consider moving
it to a better deal. Instead of giving the lender to extra, the money you save on
your month payments could help reduce your more urgent debts. Switching your utilities,
phone provider etc… can also save you a lot more cash. Looking into switching cell
phone providers. Each saving all adds up.
- As well as decreasing your outgoings, you can also try to look at ways of increasing
your income. Try to work overtime or get a second job if possible. Have a good clear
out at home and sell unwanted DVDs, CDs, books, electrical goods, clothes and kids
- It is important to keep communication with your creditors. Let them know what your
situation is. They will not be sympathetic if you ignore their letter and calls.
Lenders are used to dealing with requests for payments to be postponed or interest
to be frozen to talk to them and you may find that they may be able to help.
- Seek advice from a free debt counselling service. Some find it helpful to discuss
their credit debt options with a representative from the
National Foundation for Credit Counseling of the NFCC. The NFCC is a non-profit
organization who can help anyone facing financial problems with debt