By Lynnette Khalfani-Cox, The Money Coach
Are you ready to get rid of those dreadful credit card
bills? Then follow these simple steps to having zero debt.
1) Put your debts in writing
The first step in becoming debt-free is knowing exactly how much credit card debt you owe. Don't "guesstimate" about your bills. Get honest about your situation and list all your bills in black and white. Use whatever method works for you. But do get everything on paper, by either writing it down or using a spreadsheet
Web site resource: www.AnnualCreditReport.com
The first step in becoming debt-free is knowing exactly how much credit card debt you owe. Don't "guesstimate" about your bills. Get honest about your situation and list all your bills in black and white. Use whatever method works for you. But do get everything on paper, by either writing it down or using a spreadsheet
Web site resource: www.AnnualCreditReport.com
Get your credit reports free from TransUnion, Experian and
Equifax for a complete listing of all your credit accounts, including
mortgages, student loans, car notes and credit cards.
2) Negotiate with creditors
Have you tried calling your credit card companies and requesting a lower interest rate? You might be surprised at how readily you can get a "yes." A study from Synergistics found that 75 percent of all consumers who asked for a lower rate got it. If you've been paying on time, and a creditor won't budge on a sky-high interest rate, consider switching cards.
Web site resource: www.CardRatings.com
CardRatings.com lets you comparison shop online for the best available credit card rates.
3) Use windfalls properly
A windfall is any "extra" lump sum of money that comes your way. It could be a year-end job bonus, an income tax refund check, a stimulus payment from the government or even life insurance proceeds or money from a divorce settlement. Don't blow this money! Use it to knock out debt.
Have you tried calling your credit card companies and requesting a lower interest rate? You might be surprised at how readily you can get a "yes." A study from Synergistics found that 75 percent of all consumers who asked for a lower rate got it. If you've been paying on time, and a creditor won't budge on a sky-high interest rate, consider switching cards.
Web site resource: www.CardRatings.com
CardRatings.com lets you comparison shop online for the best available credit card rates.
3) Use windfalls properly
A windfall is any "extra" lump sum of money that comes your way. It could be a year-end job bonus, an income tax refund check, a stimulus payment from the government or even life insurance proceeds or money from a divorce settlement. Don't blow this money! Use it to knock out debt.
Web site resource: www.IRS.gov
Instead of getting a big tax refund check each year, adjust your W-4 withholdings at work, so you get a bigger paycheck. The IRS Web site has detailed instructions--see IRS Publications 505 and 919--on how to adjust your withholdings.
4) Get free, quality financial help
Don't allow shame and embarrassment to keep you from receiving professional help. Being in debt doesn't mean you're a bad person, nor is it a knock against your intelligence. Unfortunately, most of us simply didn't learn about managing credit and debt wisely at home, or even in school.
Instead of getting a big tax refund check each year, adjust your W-4 withholdings at work, so you get a bigger paycheck. The IRS Web site has detailed instructions--see IRS Publications 505 and 919--on how to adjust your withholdings.
4) Get free, quality financial help
Don't allow shame and embarrassment to keep you from receiving professional help. Being in debt doesn't mean you're a bad person, nor is it a knock against your intelligence. Unfortunately, most of us simply didn't learn about managing credit and debt wisely at home, or even in school.
Web site resource: www.NFDM.org
The National Foundation for Debt Management is a reputable non-profit agency that helps people struggling with debt. Their HUD-certified credit counselors negotiate with creditors to lower your interest rates and can create a plan for you to quickly eliminate debt.
5) Create a realistic budget to stop over-spending
The #1 rule of proper budgeting is to spend less than you earn. It sounds simple enough. But 70 percent of all Americans don't have a working budget. And even most of those who do create a budget can't stick to it--even though a well-made budget can help you avoid going into debt
The #1 rule of proper budgeting is to spend less than you earn. It sounds simple enough. But 70 percent of all Americans don't have a working budget. And even most of those who do create a budget can't stick to it--even though a well-made budget can help you avoid going into debt
Web site resource: www.mint.com
This is a great
online budgeting Web site with tools to help you track your spending and stay
out of debt.
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