If you find yourself overwhelmed by the idea of trying to repair poor credit, we’ve got some helpful strategies for you to try. Continue on to learn which debt to pay off first and other ways to repair your credit.
Dealing with credit card debt can feel overwhelming.
It’s difficult to take those first steps and decide which debt to pay off first.
Thankfully, by taking a few easy to follow pieces of advice you too can start down the path to financial security.
Check out these useful tips to learn how to get out of debt.
1. Figure Out What You Owe
The first step to take when trying to figure out the best way to pay off debt is to add up your total debt. Just knowing exactly how much you owe and who you owe it to is very helpful.
Use this new knowledge to create a workable debt repayment plan. Start setting up payments and figuring out which card has the highest interest rate and late fee.
One of the best ways to reduce the burden of your debt is to simply call your card provider. If you are honest with them and explain your situation they can often help.
They may be able to set up a payment plan or reduce your interest rate to allow you to make your payments. This benefits them by keeping your account from going into default.
They would always rather receive something from you each month than have to write off the entire debt.
3. Decide Which Debt to Pay Off First
Now you know exactly what you owe. Before making more payments, make sure you set up an automatic payment for the minimum. Getting out of debt is hard enough without having to pay late fees.
Once that’s done, apply whatever extra money you have left to the card with the highest interest rate. This lets you avoid accruing more interest than you have to.
4. Balance Transfer
A balance transfer can be a great way to reduce the total interest you pay to your various card companies. By transferring your balance from a high-interest card to a low or no interest one you save significant money.
Start by comparing different credit cards available to you. Figure out which one has the best introductory offer or lowest overall rate.
Once you’ve transferred the money you have to make sure and pay it off before the offer ends. If you simply use the additional credit to rack up more debt it is completely counterproductive.
5. Debt Consolidation
The last option available is to apply for debt consolidation. This combines all your unsecured debts into one single account with an interest rate that is usually lower.
It gives you a single payment to make each month rather than several smaller ones with different banks. There are specific eligibility requirements in order to qualify for debt consolidation.
Keep in mind though that this will close out your other accounts and you will no longer be able to use them.
Focus on the Future
It’s no good to beat yourself up for past mistakes. In order to recover fully from your debt, you have to move forward. Once you know which debt to pay off first you can make the other decisions you need to get out of debt.
You can get a firmer grip on your financial life using the information in these other debt reduction articles.