The only way to eliminate debt is to create a realistic plan of action for repaying creditors. Fortunately, there are numerous ways to reduce debts, which lower your monthly obligations. Fewer bills mean more money, which can be used for other things. Before considering bankruptcy or a type of debt settlement, consider the following tips for eliminating unnecessary debts. Pay More than the Minimum Payment If you want to payoff credit cards, intend on paying more than the monthly minimum. If possible, double or triple the amount due. The best way to quickly payoff credit card balances is to apply a lump sum of money toward the debt. This money can come from second employment, income tax return, the sale of a personal item, etc. Another tactic for reducing a credit card balance involves obtaining loans or cash gifts from friends or family members. Acquire a Bill Consolidation Loan Bill and debt consolidation loans are ideal for persons hoping to become debt free. If you own a home, consider a home equity loan or cash-out mortgage refinancing. The funds acquired from the transaction can be used to payoff high interest credit cards and other debts. Home equity loans create an additional loan. Because these loans have low rates and fixed terms, they are normally easy to repay. If choosing the refinancing route, the monies received are wrapped into a new mortgage loan. Hence, the amount owed on your home will increase. Other methods of bill consolidation include obtaining a secured or unsecured personal loan from a financial institution. If you cannot qualify for a consolidation loan, seek the help of a debt management company. Obtain a Credit Card Balance Transfer Individuals with excessive credit card debt generally cannot fathom obtaining a new credit card. However, credit cards offering balance transfers at an introductory rate of zero percent provide an effective means of eliminating debt. For the most part, zero percent is offered for the first 12 to 15 months. This allows ample time to reduce or eliminate the credit card balance. Because zero percent only applies to the balance transfer, avoid new credit card charges. |
