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Step 1
Check your credit report for any old debt. You can never assume that everything is paid off. This is also a good time to check for fraudulent activity. If there is any information that is incorrect, contact your credit facility immediately. Knowing where you stand can help you figure out where to begin.
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Step 2
Call your credit card company and ask to lower your interest rate. If you have been in good standing and paying at least the minimum amount due on your card, usually the credit card company will gladly lower your interest rate. Choose the debt with the lowest balance and try to pay that off first without sacrificing your other bills. This may seem hard or overwhelming at first but once you change your mindset you can do it.
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Step 3
Once you have paid off the lowest bill continue to do the same with any other credit card or loan you may have. As you pay off each credit card close out the account. This will stop you from the vicious cycle of paying off and re-using. Technically you only need one major credit card for purchases. Don't let anyone tell you otherwise. Most major cards have some sort of rewards program that you can sign up for.
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Step 4
If you have any pending school loans do not wait until it's in collections to try to fix the situation. Call your loan officer and request a deferment on your loan. This will buy you some time and you can set up a payment plan that is more suitable to your needs. Double up on your payments when possible. Decide to use cash or your debit card when needed. In a couple of months you will be closer to financial freedom.
Comments
iknewthat said
on 7/12/2009 Great article filled with great information. 5*****
betterbody said
on 7/11/2009 Excellent tips for getting out of debt. 5 *s and a recommend.