How to Pay Off Bills
The need to payoff bills is something nearly everyone has faced at one time or another. If bills are allowed to accumulate, you could find yourself having a hard time even meeting monthly minimum payments. If this sounds familiar, don't be disheartened, there are steps you can take to begin alleviating that debt and paying those bills off.
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Instructions
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Assuming your bills have not been turned over to a collection agency, credit card bills should be first on the list to pay off. Take a close look at your most recent credit card statements. Specifically, determine which one has the highest Annual Percentage Rate (APR) and which one has the lowest. How much credit is available on the lower rate card? If possible, transfer the balance from the higher rate card to the lower one. If there is not enough credit on the lower rate card to transfer the entire higher rate card balance, transfer as much as possible.
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If you have been paying extra on any of your cards, now is the time to begin focusing on one card at a time, beginning with the highest rate card. While maintaining the minimum payments on the lower rate cards begin paying extra or even making extra payments on the one with the higher rate. If your bank provides online bill pay services setup bi-monthly payments, one payment paying the minimum of the card, and one paying extra. This is sometimes easier on the pocketbook than trying to pay more in one single payment.
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Once you've taken care of that nasty high interest card, it's time to focus on the card with the next highest interest rate. As each bill is paid off, take the money that would have been applied to it and apply it to the next one in line until voila...no more credit cards bills.
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Now that your credit cards are paid off, there should be extra funds in your budget to concentrate towards other bills such as auto, school, and medical debt. It is best to focus on the one that can be paid off the quickest. Using an online debt calculator like the one found in the Resource area at the bottom of this article will help you in determining which bill to pay off first.
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Congratulations, you have done it! It may be a long road paying off your bills, but it is well worth it. You will have the financial freedom that very few people have these days. Now take the extra money you have worked so hard to regain and treat yourself to something special...without using credit of course.
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Tips & Warnings
Do you have a mortgage payment? If so, consider applying the extra money you now have towards paying extra on your mortgage. Doing this will save you thousands of dollars over the life of the mortgage.
If you are eager to pay your bills off sooner, consider making a loan against your 401k. Repayment of a 401k is much wiser than allowing debt to accumulate over time.
You will find some creditors are willing to renegotiate terms for a lower interest rate. It doesn't hurt to ask.
