4 Steps To Becoming Free From Debt by Dan Edward

Most Americans are in debt! They owe money on almost everything that they have - their homes, cars, furniture, clothes, and education, - and debt has no doubt become a way of life.



It is not all bad for us to owe, some debts are actually good. For instance, what you owe on your home can be an opportunity for you to balance out your income tax. Also, having a little debt, which you make payment to promptly and regularly can keep your credit rating up and qualifies you to take loans at good rate.



But the problem is that most people now owe too much, and have found themselves deep in debt, to such magnitude that some don’t even know how much they owe or to whom anymore. This kind of lifestyle, if not put to check, will lead only to one destination: financial crises!



If you are already in financial mess, with lots of debts hanging on your neck, don’t despair, there is a way out if you take the four steps I’m recommending:



Work On The High Interest Rate Cards First



Identify the credit cards and other credit facility where you are paying at high interest rates, and high minimum payments. Then, work more towards paying off the balances on credit cards that charge the highest interest rates first.



This however does not mean you shouldn’t pay the minimum balance on other cards or credit facilities that you took, what I mean is that you should strive to pay more than the minimum balance (as much as you can) on the highest interest rate cards, so that you can quickly pay them off and avoid paying more in interest charges.



After paying off the highest interest rate cards, then channel the money you could have used for settling it to offset other cards.



Contact The Credit Card Company



If you are having difficulty meeting up to your repayment plan, you should reach out to the credit card company and let them know why you are having problem. They will be able to assist you by negotiating a lower rate with you or recommending a suitable alternative repayment plan and therefore prevent damage to your credit rating.



Consolidate Your Debts



You should try consolidating your debts as much as you can. This can be done in several ways. One, you can move balances from a credit card of higher interest rate to another of lower interest rate. You should however consider the transfer fee you will have to pay before going ahead to using this option.



Another option you can use is to take a home-equity loan or line of credit, which is of lower interest rate than the credit card you are working to pay off. Using the loan to offset the credit card debt, you can now be paying lower minimum monthly payments.



Also, you can consider taking a secured loan on another form of property, such as your vehicle, and then using the fund to offset your high interest rate credit card.



Don’t Touch Your Retirement Savings



Even though paying off your debt should be one of your top financial priorities, it shouldn’t be at the expense of your retirement savings. You shouldn’t take from your retirement savings to pay off debt. If possible, you can borrow from it or against it at lower interest rate to pay off debt, and this allows you to continue saving for retirement and also paying off your debts.



It may be very normal in America to owe money, but there is a big burden that comes with been under the pressure of huge debt. You don’t have to remain under this pressure all the rest of your life, but you can free yourself from debt completely, or at least reduce it by taking the four steps I’ve shared with you above.


Dan Edward runs DebtConsolidation-Help.net, where he shares loads of information on how to get out of debt without filing bankruptcy. Read more of his incisive articles, and get more informed about how to end your debt at http://debtconsolidation-help.net




Article Source: 4 Steps To Becoming Free From Debt