5 Ways To Get Rid Of Your Debt

You can always throw away a bad purchase you made but you can’t get rid of your credit card debt that easily. But there’s good news, if you continue to chip away at it, you will one day be debt-free. Here are 5 innovative ways to get rid of your credit card debt once and for all.

Extra Payments

To get rid of your debt faster you’ll need to make a dent to the principal balance. One way to do this is to deposit all the extra money you come across into your credit card account. You may get a bonus from work, a friend pays you back money they owed you or you may get lucky and find a $20 bill on the floor. Whatever the case, if you come by some extra cash, drop it in your account before you’re tempted to spend it foolishly.

Use Your Savings

If you have a steady paycheck coming in every two weeks you may want to consider depleting your savings account to pay off your debt. This is a dangerous tactic and should only be undertaken if your job situation is stable. With this strategy, as soon as you pay off your debt you will need to build up your savings again. By using this method you will avoid paying those pesky interest charges for months (or years) to come.

Personal Loan

If you’re in debt due to circumstances outside of your control (such as a job loss or illness) and are generally good at managing your money, you can ask your family or friends for a loan. If they agree, make sure it’s on paper, make sure you pay them interest and make sure you don’t miss a single payment. If all goes well, at the end of the day you get your debt paid off and they get some interest out of the deal.

Make Sacrifices

You got into debt because you spent more money than what you had. Often times this is because you wanted to live a lifestyle you simply could not afford. George Carlin said it best: You spend money you don’t have to impress people you don’t even like. So if you are serious about getting rid of your debt, don’t bother keeping up with the Jones’. Make sacrifices and downgrade what you can. You can really decrease your monthly expenses if you begin to cut out unnecessary purchases. The more money you have left at the end of the month means you can pay down your debt faster.

Minimum Payments

When you get a credit card bill they always tell you what the minimum payment is. This is what they want you to pay. They wan’t to get their money back, but very very slowly. The credit card companies know the longer you take to pay it back the more interest they get. You can use a¬†credit card interest calculator¬†to see just how much you’re paying in interest each month. Instead, pay more than the minimum payment. If you don’t know how much, just double it and make it a rule.

Anum

Anum Yoon is the founder and editor of Current on Currency. She loves all things personal finance, which is why you'll find her work all over the PF blogosphere.

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