Sometimes you can catch your debt before it becomes completely unmanageable. When this is a possibility for you, you still have the ability to reduce debt the good ole way, by simply paying on your bills, and learning some time tested methods of staying out of debt. What am I talking about$%: What is the old fashion way of reducing debt$%: Well, it is easy, pay your bills. However, there is a little more to it than that, such as exercising your ability to control yourself and your spending.
Now, the first old-fashioned way to reduce debt is to pay more than the minimum on that bill. A good rule of thumb is to take the amount on the bill and double it. In other words, if your bill is for $50, pay $100. If the bill is $100, pay $200, when you write that check to send off to the creditors. Now, of course, not everyone can do that. Therefore, you should consider what you could comfortably afford. Even $10, $20, or $30 more is better than only paying the minimum.
Paying the minimum does nothing for the principle of the debt. Essentially paying the minimum only pays for the interest in most cases. Therefore, adding just a little more to each bill will help you work towards paying the principal and eventually save you money in the long run with interest fees.
Next, way to reduce debt is to set your priorities. Consider need versus want. Do you want a new refrigerator or do you need it$%: Absolute need should take high priority of a desire to have something. Set your priorities by making sure the bills are paid before you consider entertainment or non-essentials. We all want to have fun, but by making sure you pay your bills, you will ensure that credit is there later if you should need it.
Reduce debt by avoiding taking out more loans and credit cards. By getting another credit card or using one loan to pay another loan, you are not solving the problem; instead, you could possibly aggravate the problem even more. The only time this is acceptable is if you are trading a high rate of interest for a lower one. For example, obtaining a low interest credit card and transferring the balance of one card to the other, in efforts to help reduce debt. This applies for loans as well, if you have a high interest loan and then obtain a debt consolidation loan for example, you may actually save money.
However, getting another credit card just because one is maxed out, does not help the problem of debt in any way, shape, or form. Reduce debt by knowing your spending habits, having control, and paying your bills on time.
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