Tips for Paying Down Debt

If you are reading this article then you are already taking the most important step in paying off your debt. You are getting educated in how to pay off your debt faster. There are good ways and bad ways to pay off debt. First, if you have multiple credit cards with balances, pay the minimum payment on each of the cards except for the card which has the highest interest rate. Pay as much as you can possibly afford each month towards the balance on the card with the highest interest rate. This will allow you to pay off this card faster and reduce the interest accrued. Once this card is paid off pick the credit card with the next highest interest rate and start paying off that one. Each time a card is paid off you will have more money available to pay towards the next one.

Avoid title loans and pay day advance loans at all costs! These types of debts have very high interest rates and fees associated with repayment. Many debtors find themselves in a debt treadmill with these debts, making the minimum payment each month and never paying off the principal. In addition, if you use your vehicle as collateral for a title loan you may find yourself without a car if you default.

Renegotiate your interest rates on credit cards, electricity, cable or satellite television, internet, and all of your other regular expenses annually. Many of these companies will give you a lower rate rather than lose you as a customer. Take the savings and pay it towards your debt in order to pay it off sooner. Avoid high car payments and keep your vehicle longer. If you can barely afford to pay your credit cards then you don’t need to have a $500 car payment each month. Buy a used car that you can comfortably afford the payment. Once you pay off your car keep it for a few years and use the money you would have spent on a car payment and pay off debt. Making these minor adjustments to your spending habits can save you thousands of dollars and get you out of debt more quickly.