Debt Teacher - Get Out Of Debt Tips

Get Out Of Debt Tips

Everyone has debt, and the Internet is filled with get out of debt tips, some smart, and some not so smart. If you follow only the reputable get out of debt tips, you will get out of debt and move on with your life.

Stop making the minimums

One of the most popular get out of debt tips is to increase your monthly payments. Take your raises or bonuses, and pay your credit card companies a little faster. If you have a minimum payment of $100, you may find that you are paying $70 in interest on that card, so you are only paying your debt down by $30 a month. If you increase your payment to $130, only 30% more, you're reducing your debt by $60 a month, twice as fast. If you can pay double the minimum, $200, you'll be paying down your debt by $130, over four times as fast. This is one of the most reliable get out of debt tips available.

Negotiate your Rates

Call your credit card companies now. Most of the customer service agents have limited authority, especially as they have been outsourced to India, but they are all allowed to make small adjustments to your account to keep you happy. If you are paying 17.99% interest, they may be able to lower you to 14.99% immediately. That may not seem like much, but as in the example above, if you lower your interest from $70 a month to $60 a month, that same $100 pays down $40 in principal, you you're paying down a third more without paying out any extra money. Now, most websites touting get out of debt tips stop there, but this is a multi-stage game. If you were in penalty rates (29.99% or higher), your first call may get you down to normal rates 24.99% or 19.99%. If you have been sending in over the minimum for a few months, most companies are prepared to lower your rates further. You may find that by calling everyone every two months, your rates can be cut in half.

Interest is the Enemy

What is keeping you in debt is the interest payments. As you increase your payments, the percentage of your payments that is "wasted" on interest goes down, wiping out debts fast. If you can bring your rates down, then you can increase your debt reduction even further on the same payments. Stay on top of your debts, and you will get ahead.

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