| |
| |
|
|
Debt Relief Information |
|
The 7 Secrets to Getting-and Staying-Out of Debt
As vice president of the American Credit Foundation, a nonprofit organization that helps individuals and families manage their debt, Mike Peterson knows firsthand how financial problems can wreak havoc in one's life. Each day, counselors at the Midvale, Utah-based foundation help desperate clients dig themselves out from under piles of unpaid bills, stern notices from collection agencies and ominous foreclosure threats. So, exactly what does it take to get-and stay-out of debt? Here are 7 secrets that will help set you on the right path. 1. Cut Back on Credit Cards Banks love to send offers for new credit cards to consumers, and mailboxes overflow with low-interest-even no-interest-"unbeatable deals." This doesn't mean you should apply for them and risk running up large bills. "Ideally, one should have no more than two or three credit cards," Peterson says. "I would recommend a Visa or MasterCard, followed by an American Express card. Having two or three different cards will allow you more flexibility when utilizing credit, as some companies do not accept one or the other." 2. Understand the Consequences of Breaking Rule #1 Even if you have excellent credit and zero debt, applying for too many credit cards can damage your credit rating. "Generally, inquiries for new credit can affect your credit report for up to two years," Peterson says. "Having too many credit cards-whether carrying balances or just high amounts of available credit-can negatively impact your credit score. Banks will look at your credit based on what you currently owe and also what ability you have to immediately incur additional debt." 3. Stop the Spending To minimize or avoid debt, monitor your monthly expenses-and halt spending when your budget starts to get tight. "An additional reason to limit the number of credit cards you have is to prevent the possibility of not being able to keep track of all of the expenses you have incurred, which may make it difficult or impossible to pay them off each month," Peterson says. If you reach that point, he has one simple rule: "No more charging." "Commit now to discontinue the use of credit cards," he says. "In fact, cut up the cards you have, call the companies, and close the accounts. If you must have a credit card for work, try a debit card. These are widely accepted, and the funds are pulled directly from your checking account." Don't apply for another credit card until you can pay off all balances due and be 100% debt-free. 4. Pay More Than You Owe Once you fully understand the monthly minimums you owe on each debt, add 5% or 10% to your total payment, if possible. "The addition is not mandatory," Peterson says, "but it will dramatically improve the success of your debt-reduction program." 5. Stay the Course Continue to pay 5% to 10% more on each debt until all debts are completely paid off. Even if your minimum payment requirements decrease as your debt diminishes, keep making the same payment, Peterson urges. "And if one credit card is finally paid off, make the same total payment each month," he says. "Just apply the extra funds to one of the other debts." 6. Do the Math Before you dig in your heels and say, "I just can't do this," it's worthwhile to see how Peterson's advice plays out in real dollars. "If you owe $2,000 on a credit card with a 21% interest rate, and you make only the minimum payment each month, you will owe on this account for approximately 19 years-and pay a total of $6,725.64 in principal and interest," he says. "The steps I've already discussed will help you pay off the debt in a fraction of the time. The emotional commitment to make this plan work may not be all that easy, but using this program-even without the additional 5% or 10%-will allow you to pay off the debt in about 8.5 years, and you will save approximately $2,387 in interest." 7. Turn the Tables-and Start Earning Money If you pay off your $2,000 debt in 8.5 years (versus 19 years of minimum payments), you will have 10.5 years to place that monthly minimum payment in an interest-bearing bank account, retirement account or other investment. "Interest is a magical tool," Peterson says. "Creditors use it to their advantage all the time. It can also work in your favor if properly implemented into the right program. If the steps mentioned above are taken, it won't be long before interest is working for you, instead of against you." ----- Australian Debt Reduction offers all Australian consumers free debt consultations to assist them in getting back on top of their debt. They explain debt consolidation in simple terms and if you have over $4,000 in debt there are methods available to the Australian public you may not have heard of to help limit the amount of interest paid and rapidly reduce your debt. Visit Australian Debt Reduction at http://www.australian-debt-reduction.com.au or contact them directly on 1300 306 272
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Dont Let The Good Times Bury You It is vital to get rid of debt while things are going well. Yet the opposite is usually the case. New Bankruptcy Law Makes it Harder to Stop Foreclosure On October 17, 2005 President Bush's sweeping bankruptcy reform law goes into effect forever changing the rules of debt collection in this natiion. Consumer advocates and the public appear to be completely unaware of the total and complete victory of the creditors under the new legislation. The Five Most Popular Questions About Bankruptcy WILL MY CREDITORS STOP HARASSING ME?Yes, they will! By law, all actions against a debtor must cease once bankruptcy documents are filed. Creditors cannot initiate or continue any lawsuits, wage garnishees, or even telephone calls demanding payments. Pay Off Your Student Loans and Reduce Your Debts Financing a college education is one of the more expensive debts you may incur. Student loans can take years or even decades to pay off. Is Debt Negotiation Bad? Educating yourself about the ins and outs of debt negotiation is a good first step. Please note that the term 'debt negotiation' is also known as debt arbitration or debt settlement. Establish Money Saving Goals For Added Success Having something tangible to strive towards can work wonders for your money-saving efforts. To those of you that have already been actively implementing money-saving tips in order to lower your monthly bills, for added inspiration, establish a meaningful goal along with a specific dollar amount. Bankruptcy: Who is to Blame? If you are considering bankruptcy as a solution to your financial problems, you are not alone. Bankruptcy is on the rise in this country as consumer debt piles higher and higher. Is Independence Overrated? Happy Independence Day from The Money Motivator!If you don't celebrate "The 4th of July" like we do in the United States, today still presents you with an awesome opportunity to examine your independence.Independence means the quality or state of being dependent. How To Pay Credit Card Debt Off If you are determined to pay credit card debt off you are making the best financial decision of your life. The reason credit card debt is so bad is because it carries such a high interest rate. New Bankruptcy Law - Targeting the Wrong People? Last April, President Bush enthusiastically signed into law the oddly-named Bankruptcy Abuse and Consumer Protection Act. This bill, representing the biggest overhaul of bankruptcy law in twenty-five years, was written in order to discourage "bankruptcy of convenience. Why You Should Get Out of Debt Today? The main reason for getting out of debt today, is because people with little or not debt have more control over their future:1. They have more discretionary income, meaning that you won't be living pay check after pay check as you probably are right now. New Bankruptcy Law - Where's the Consumer Protection? On April 20, 2005, President Bush signed into law the Bankruptcy Abuse and Consumer Protection Act, a piece of sweeping legislation that brought about the most sweeping changes in personal bankruptcy law in the last quarter century. This bill, which takes effect in October 2005, passed with the overwhelming support of both parties of congress, claims, through its very name, to offer "consumer protection. Top Ten Reasons People File for Bankruptcy 1. Eliminate the legal obligation to pay many of your debts. Tips For Saving Money Still living from pay to pay? Or envying those great wealth accumulators and wondering how they did it? Every month you make a resolution of saving some dollars from your paycheck, but only end up breaking it. Looking for some magic formula for saving money?Well, there’s no magic formula—only some simple rules to be followed with determination and persistence. Bankruptcy 101 Bankruptcy still remains a mystery in the eyes of many consumers. This article will review the facts of bankruptcy as per written law. Is There Any Way To Get Out Of Debt? In this era where we are bombarded daily with commercials on television, radio, billboards, through email, not to forget the flyers slipped under the car's wiper blades while shopping at the mall, it's no surprise that so many of us find ourselves endlessly in debt to the services and products offered by others. How can we refuse, when we're baited with the juicy orange carrot of '0% APR' up to a certain amount or for a specified time, or 'no money down' and 'easy installments' of just so much per month?Before we know it, we're in debt. Currency Trading Fee Concept Troubles with Global Economy; Do you see future problems with our global economic plans to make a one world system, where free trade and prosperity can rein the world over. Many world leaders have agreed a one-world system is best for all. Debt Validation: Do you have to pay ? It happens all the time. Debt collectors try to collect on debts that consumers have no knowledge of or never owed in the first place. Whatever You Do....Dont Save Money! No, that's not a misprint. Even though falling interest rates are good when you want to get a loan, they are bad for people with savings accounts. Life After Bankruptcy Bankruptcy and Credit - What Happens After Your Debts Are Discharged?Bankruptcy will remain on your credit report for ten years. But you may be able to get credit fairly quickly - almost immediately after a bankruptcy - although you will pay dearly for it.
|
||||||||||||||||||||||||
