Debt Management Review

Debt Management

 

The main explanation why so many people today find themselves in debt is due to unrestrained usage of credit cards! Yes! It’s true. Credit cards offer the advantages of taking the goods home today and paying for them later. And this convenience has been misused by our generation beyond !

 

 

On top of that, due to the economic recession, so many people find themselves without jobs. This means no or lesser income, more purchases on credit card, more amount due on it and a person, neck deep in debt!

 

 

Debt is a dreaded word! Once you fall in it, it takes a lot of planning and perseverance on your part to get yourself out of it. It would take some really good debt management tips and strategies to bail yourself out of this unwanted situation.

 

Effective Debt Management Strategies

 

 

For instance, buying new clothes and cosmetics even when you have a cupboard full of them, taking a yearly membership of a gym when you do not even go there once a week – these are some of the examples of expenses that you should cut down. So, the first debt management advice is to eliminate all unnecessary expenditure. Prepare a monthly budget and stick to it.

 

Become a Savvy Shopper!

 

When you set out shopping, make use of discount coupons whatever location you can. Shopping from second hand stores, shopping for things online, buying from discounted stores, these are some of the ways to reduce your expenditure, which will keep in check any further additions to your debt.

 

Use Cash for Payments and Keep Only One Credit Card!

 

Wherever practical, use cash for payments. This will ensure that you only buy things for which you have money available. Reduce your credit card usage to the minimum. One of the best tips here is to keep only one credit card and give up the rest.

 

 

Lesser the number of credit cards, less significant will be their usage and less relevant will be the probability of you being in debt! Moreover, you won’t have to keep a track of a number of last dates of payment if you have only one credit card. This will keep the tendency to default on payments due to bad memory, under check too!

 

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Commence Paying Off the Debt!

 

For those of you who already have a lot of debt accumulated on their credit cards, it is time to start paying it off, one by one. So, take out all your credit cards, write down the payments due on them as well as the interest rates that you pay on them.

 

 

Start with paying the credit card debt on which you are paying the highest rate of interest and then move on to the next highest and so on. In case you have a credit card, on which very small amount is due, you can pay this debt off first and give up the credit card altogether! Remember, only one credit card is more than enough!

 

Credit-Cards-Debts

Consolidate your Credit Card Debt!

 

While paying off your debts, you can go in for debt consolidation. By doing this, you can transfer all the amounts due on various credit cards, in one card. This will lower down the overall interest rate that you pay on the debt, at the same time, will save you the headache of keeping track of a number of credit cards, their due dates and due amounts!

 

Negotiate for Decreased Interest Rates!

 

One of the most useful debt management strategies is to negotiate with the creditors, be it banks or private lenders, to lower your interest rates or the amount due. A good way to negotiate, provided that you have the money, is to offer them a lump sum, which is lesser than the amount you own, all at once. Sometimes, the creditors may agree to this arrangement, if they feel that they might lose out on the entire money you own them!