When dealing with a lot of debt, some people feel overwhelmed and simply do not take any steps to improve their situation. This is costly in both the short and long run, and it is wise for a person to follow these three simple steps to reduce his or her debts fast.
One-time payoff: Many with credit card debt will never pay off their bills as it is nearly impossible when dealing with double-digit interest rates. One way to fix this is to pay off the card in one payment. Now, this may sound hard if the debt is thousands of dollars. However, one way to pay it off quickly is to call up the bank or lending institution, explain the situation and offer a one-time payment to pay off the card. If a borrower already struggles to make the monthly payments or is usually late, the credit card company will probably jump at the opportunity to get some money, as opposed to none in the future. With this method, some people have been able to pay their debt off for 10 or 20 cents on the dollar
Balance transfer: As mentioned, many have high-interest credit cards and have trouble making monthly payments. Provided a consumer has a decent credit score, he or she should consider a balance transfer. With this, one can move their high-interest rate balances to a low-interest rate card. Simply put, when going from 30 percent to 10 percent, a person will have an easier time paying off his or her balances. Of course, with a balance transfer, a client should always read the fine print and understand the risks. However, when used wisely, one can save hundreds of dollars, if not more, in interest payments every year.
Big sale: Often, a person will get into debt when he or she buys expensive things or cars. To fix the problem quickly and clean out the house, a person with massive amounts of debt should consider holding a garage sale. With a weekend sale, a consumer can often make hundreds of dollars for a few hours of work. Of course, a consumer with an expensive car may want to take it further by selling his vehicle or trading it in for a cheaper model. Remember, it is often necessary to take drastic measures when getting out of debt, and one such thing many opt to do is sell their old and unused stuff that got them into debt in the first place.
With these three simple and easy to follow tips, a consumer can pay down his or her debts quickly. While this is true, one should remember to keep their eye on the prize and continue with baby steps.
This article was written by Steven Moore, who has been covering consumer finance and the credit card markets since 2006. You can learn more and connect at his Google+ page.