Having debt is not ideal for most people, but it seems very few people don’t have some kind of debt. The problem with debt its the longer you let it go, the more you will ultimately end up paying in interest and fees and the more of your money is tied up and unable to be spent how you want or saved for something else or emergencies. If you are looking for ways to get rid of debt, here are some tips on how to reduce debt fast.
How to Reduce Debt Fast
Cut up credit cards and stop using them, but keep making payments. One of the biggest traps people fall into is borrowing money from credit cards over and over ever month. Credit cards come with high interest loans and while they can help build and keep good credit, you should not max them out every month. Cut up your credit card and keep making your payments every month. It is best to make a payment larger then your minimum to not only reduce your debt fast, but keep it in good standing.
Pay off the little things. Many of us have little nagging things on our credit report that need to be payed off. We have often ignored them for so long, they now have accumulated interest and fees. Call the place that is handling it and ask what they would take for a minimum settlement. Sometimes, they are willing to take less to settle.
Keep paying bills even after you don’t have them anymore. This seems weird, but if you keep ‘paying’ a bill (applying this money in your budget somewhere else) that you don’t have, but are used to paying, you can reduce your other debts quicker by making larger payments. Since you already account for this in your budget, you won’t see any difference in money going out.
Don’t pay off debt to start new debt. This seems like common sense, but how many times have you thought to yourself, “This is almost payed off, then we can get this..”? Doing this almost guarantees you are going to always be in debt. Instead, when you pay something off, set aside that money to save for something you want or need so you can buy it outright.
Pay off debt based on how high the interest is. If you are stuck making a choice on which bills to pay larger amounts to, just look at the interest rate. It is always in your best interest to pay off high-interest bills before ones that are lower. They quicker you can pay these things off, the less you will pay overall.
Give yourself some incentive. If you are excited to pay something off, you are more likely to do it. You don’t have to make it something big or expensive, either. Just find some way to get yourself excited and reward your hard work when you get something paid in full.