Reducing debt can be difficult, but it is something that must be managed carefully. By reducing debt you can enjoy lower interest bills each month which will help you reduce the principal debt.
If you are trying to reduce your debts, here are three simple rules to keep in mind.
We always advise people to pay as much as they can afford to pay towards their debts. The longer you remain in debt the more interest you will end up paying. Even making small payments above the minimum monthly payment on your credit card bill can help reduce the overall burden of debt.
If you are serious about reducing your debt, you need to have a carefully planned budget. Any surplus money from your budget should be used to repay debt.
Most people get paid weekly or fortnightly, but their credit card bills come in monthly. If you wait until the end of the month to make your repayments, you may find that you only have enough to make the minimum payment amount or at worse, not even that.
This can then lead to increased interest which in turn will increase the amount of time that you will remain in debt.
A better way to handle this is to make a payment on the day you get paid, paying the full amount you have allowed for in your budgeted.
If your credit cards are at their maximum limit and you are struggling to repay them, then there is a fair chance that you are spending more than you earn which is very dangerous. If this is happening to you then you need to stop using your credit cards immediately. Better still to avoid the temptation you should cut them up.
If you are trying to reduce your debts but the problem just will not seem to go away it might be time for professional help. At get debt free we have a team of experienced and professional debt advisors who can provide you with free assistance. Call our toll free line on 1800 98 10 70 to speak to an expert today.