Eliminate Debt - Choose Your Debt Elimination Strategy and Become Debt Free

By Lyn Bell

You have decided you want to eliminate debt but how do you go about it and what does it mean for you? What must you do, and where do you start? Debt elimination means owing no money whatsoever -- the mortgage balance is showing a zero, there are no bank or finance loans and no credit card balances. You are in fact, debt free.

We hear a lot about eliminating debt and most of us know that it makes sense to be debt free. We also hear about the strategies to eliminate debt but some of these seem to contradict one another. What are the strategies and which will be best?

When we talk about eliminating debt we often think of credit card debt because there is no term and the only end to the debt is running out of the allowed limit. But there are other debts that have high interest and high payment schedules which will set you back financially.

What to do and where to start. The following strategies are common to all good advice:

o Stop getting into more debt. In other words do not incur new debt.
o It also means eliminating unnecessary purchases especially while getting your debt under control.
o Cut up your credit cards.
o Live on cash and not plastic. This way you will get in touch with the actual money you have available to spend.
o Pay more than the minimum repayment. Paying the minimum usually covers only the interest and barely covers any of the actual debt.
o Make a personal commitment to control your spending and do a budget. Seeing your actual spending habits in your own writing will give you a clear and concise picture of where your money is going.
o Reduce your expenses -- you will have more to pay towards your debt.
o Put every cent you can towards paying off your credit card and other debts.
o Having a strategy that works for you -- decide which strategy is best in your circumstances. Planning is the key.
o Increase your income where possible -- start a home based business, take in a border, use your hobby to generate cash.

What are the conflicting views on eliminating your debt? Let's take a look at the pros and cons of each.

1. Paying off the smallest balance regardless of the interest rate. It may be the lowest interest rate of all your debt but this strategy is more of a psychological one. FOR: The reasoning is that you will be more motivated to stay on your debt free path as you get rid of one credit card debt after another and you will do it faster. AGAINST: If this is your way of thinking it may suit you best but it does not make sense money wise to pay the lowest interest as you will be paying more in interest towards the higher interest debt. Usually this strategy means paying the minimum on other debt but if you decide on this course of action do try to make a payment above the minimum required on your other credit card debts -- however small.
2. Sorting your debts by interest rate and repaying the highest interest debt first. FOR: The highest interest rate will be clocking up more debt as the interest calculates on the daily balance. It makes sense to get rid of this debt first. AGAINST: You may find you have a lot of different smaller payments to make and budgeting may be more difficult.
3. Combine the first two strategies. Sometimes you will repay the debt with the highest payment, sometimes the highest interest rate and sometimes the highest balance.
a. The biggest repayment -- FOR: By choosing to repay the highest required payment first you will have more to pay towards the remaining debts once it is cleared. AGAINST: If the debt is large and long term this will not work best as you may be repaying debt for a long time to the disadvantage of other debt and of your budget. It can work if there is a short period left to clear the debt.
b. If the smallest balance has the highest interest rate but can be cleared quickly because the balance is small then choosing this option will give you that psychological boost.
c. If you have two debts that have a similar balance but one is slightly bigger than the other consider the interest rate on each. In this case choose the debt with the highest interest charges to repay first.

In order to eliminate debt you will find it is all about spending less, increasing your income and having a workable budget. Debt elimination needs careful thought and a lot of planning.

Lyn invites you to receive a free report on Ways to Cut Your Grocery Bill and help with your budget.

Article Source: http://EzineArticles.com/?expert=Lyn_Bell
http://EzineArticles.com/?Eliminate-Debt---Choose-Your-Debt-Elimination-Strategy-and-Become-Debt-Free&id=2358568

7 Steps to Reduce Credit Card Debt

By Manny Vetti

Balance Transfers/Switching Cards

One way to reduce your debt is by transferring your balance to a different company that has a lower interest rate then you currently have. As you probably know, credit card companies make their money from the interest you pay which can usually be up to 25% or more. Many credit card providers have introductory periods where the interest rate is 0% or close to 0%. This introductory period can be anywhere from 3 months to 1 year. This is a smart move because if you can prevent interest from accumulating you can pay off your credit card in a shorter amount of time. If you cannot pay it off during the introductory period from a new card, then you might want to think about completing the process again.

Stop Spending!

This step is obvious but you must develop self-discipline. In other words, another way to reduce credit card debt is to become very frugal and not spend unless you absolutely have to. Some experts would say to even go as far as cutting up your card so that don't use it anymore or put in a safe place other then your wallet or purse. Try to use what money you do have instead of borrowing more which just adds to the problem. Use your debit card at all costs if possible.

Call Your Credit Card Company And Negotiate A Lower Interest Rate!

Sometimes even calling your credit card company and asking for a lower interest rate works. Tell them that if they don't reduce your credit card interest rate you are going to switch to another credit card company. This negotiation tactic is worth a shot, and remember, you have nothing to lose by trying it.

Pay More Than the Minimal Amount Each Month/Use Savings

If possible, always pay more then the minimal amount each month. This act alone will save you from having to pay tons of interest. The credit card companies want you to pay the minimum amount so that they continue to make money via interest. If it means tapping into savings then so be it. Your typical savings account will get no more then 5% interest anyway, and most credit cards will have interest rates above 5%. Therefore, if your savings interest rate is lower then your credit card interest rate, you are losing money by the second.

Create A Budget

This step may seem obvious to many people as well. This is a great way to attack your credit card debt because you know how much money at minimum you need to spend for basic living expenses and you can figure out how much you can allocate to paying off your credit card debt a month. Using your computer (spreadsheet) is a great way to calculate and see how much you can allocate per month to your debt. Furthermore, a budget is great way to see how long it will take you pay off your credit card debt so you are pretty certain of the date when you will become debt free.

Contact A Credit Counseling Company

Credit counseling companies are a great way to attack credit card debt as they will sometimes enroll you in a debt management program. These debt management programs are specifically designed for your financial situation and can last anywhere from 24 months to 5 years. Debt experts will analyze your current debt situation, help you setup a budget, and then work with creditors to negotiate with creditors for you. Negotiation with creditors can involve such things as reducing your credit card debt interest rate or other bills with interest, waiving late fees, and other fees, as well the possibility of reducing the total amount you owe. Moreover, they can stop the collection calls, lower your monthly payments, consolidate your debt to one monthly payment, help you avoid bankruptcy and help you save hundreds on interest! Many debt consolidation companies also provide counseling as part of the debt reduction program to make you stay on track in becoming debt free.

Obtain a Debt Consolidation Loan

If you own a home or some asset, then obtaining a debt consolidation loan can be a smart move. Any debts you have that are secured (mortgage, boat loan, car loan) can be used as collateral to obtain a personal loan, refinance loan, or home equity loan. There are many benefits to a debt consolidation loan. Debt consolidation loans usually have a lower interest rate than your credit card interest rate. Therefore, you can take out another loan at a lower interest rate to pay off your higher interest rate debt (Your Credit Card Debt!!). There are many benefits. First, you can end those debts that carry high interest (credit card debts). Second, you can consolidate your debt into an affordable low monthly payment. Third, you can improve your credit score and prevent the degradation of your credit score.

Find more debt relief solutions by visiting http://www.endthisdebt.com a website that specializes in providing debt help advice as well connecting individuals with debt specialists based on their individual debt situation.

If you need help with your debt and would like to get a free debt consultation please fill out the form here.

Free Debt Consultation

Article Source: http://EzineArticles.com/?expert=Manny_Vetti
http://EzineArticles.com/?7-Steps-to-Reduce-Credit-Card-Debt&id=872962

Eliminate Debt Quickly, Easily And Legally - Here's How To Start To Eliminate Your Debt Now

By 'Bayo Akinola-Odusola

"Eliminate debt quickly, easily and legally? Yes, it is possible and the good news is that it's really not that difficult when you know how to go about things. How to eliminate debt quickly and easily starts with you taking a few simple "baby steps". These are steps you can take today to eliminate debt quickly, but if I were to sum it all up into one word it would have to be this - Discipline.

What the experts say

"Eliminate debt quickly by being disciplined" is #1 advice on how to get out of debt quickly you'll receive from any financial expert. Apart from discipline, you'll also need a plan on how to cut down on your spending to make things work.

You're going to need a simple budget and you're going to need to follow it.

When it comes to doing what works to eliminate debt quickly, a simple, rough budget will do wonders for you. Beating debt is a challenge for anyone in the situation. However, having the right information makes it a lot easier to manage.

Eliminate Debt Quickly by Becoming Aware

You're trying hard to eliminate debt quickly but nothing seems to be working... Why?

It's not your fault.

First of all, you're continuously targeted by advertisers from all angles trying to make you "keep up with the Joneses", i.e. your neighbors and friends. We live in an age when "instant gratification" is the "normal way" of life. Every time you turn around, no matter where you are in the world, you'll be presented with one opportunity or another to get whatever you want (but don't necessarily "need") in minutes...Oh, and by the way, you can pay for it later (read: we'll chase you for the debt in a few months or years time).

Next time you see an advert for a credit card on TV or anywhere else for that matter, I want you do something. Have a deeper look at the advert. You shouldn't be surprised to see that the credit card organization goes as far as to tell you that you "deserve" all the "good things" money can buy and some. Eliminate debt quickly? Forget it because these things that will ultimately drive you into even more debt

How to Get Out of Debt Fast - A Powerful Secret About How to Eliminate Debt Quickly

If you're serious about wanting to really eliminate debt quickly, short-term savings goals are a great way to start and continue.

The beauty of short-term savings as a means to eliminate debt quickly is that it'll help you implement an easy-to-follow spending discipline - something you're going to need in order to eliminate debt quickly.

How hard will this be?

That depends on your individual circumstances and how serious want to eliminate debt quickly. It'll be as easy or as hard as you make it. That's the truth. One way to make it a lot more easier to do is to remember to give yourself the odd treat once in a while. The only you really need to do is to plan for such treats. You can eliminate debt quickly, rise above your current debt situation and take total control of your financial situation starting today by adopting a different view on things and getting motivated to take action.

How To Get And Stay Motivated To Take Action To Eliminate Debt Quickly If you're in debt it's understandably hard to get motivated to take the actions that will make a difference. Here's a little help that works for many people in the same situation as you. It will work for you to eliminate debt quickly only if you take action. When next time you're about to whip out your credit card or withdraw money you don't have from an ATM simply to spend it on something that you don't really need, you shouldn't spend time feeling guilty about it. Instead of feeling guilty, ask yourself the two very basic questions:

Question #1:

What fun, motivational one-year savings goal am I working towards?

Question #2:

I know I can't pay for this in full this month, so what's going to change by next month? Where will the much needed extra income or reduced spending going to come from? Be honest and be very, very specific.

Could you do with some help? Then download a free report on How to Eliminate Debt Fast from The Ultimate Debt Guide because if you're in debt, you're not alone. The Ultimate Debt Guide website is a new online resource that provides free creative debt solution management resources. Discover tips and tools to help you eliminate debt quickly starting in the next 5 minutes at http://www.theultimatedebtguide.com/free-report.html - Use these tips that you've just discovered and lots more to eliminate debt quickly and become debt free, fast starting today.

Download a free report on How to Eliminate Debt Fast. If you're in debt, The Ultimate Debt Guide reveals creative debt solutions you probably don't know exist.

'Bayo Akinola-Odusola is a business and personal development specialist and Founder of The Ultimate Debt Guide resource site and can be reached at [http://www.theultimatedebtguide.com]

Article Source: http://EzineArticles.com/?expert='Bayo_Akinola-Odusola
http://EzineArticles.com/?Eliminate-Debt-Quickly,-Easily-And-Legally---Heres-How-To-Start-To-Eliminate-Your-Debt-Now&id=713759