Better Business Bureau and ClearPoint Credit Counseling Solutions are
encouraging consumers to be “calculated budgeters” in their efforts to
get out of debt. Here are five tips to help you be more calculated in
budgeting and debt reduction in the new year:
#1 Set up a household budget to guide your spending patterns.
Adjust expenses to find extra money to pay down credit card and other revolving debt – even $50 a month will help.
#2 Choose a method
Debt management experts advise either paying off higher-interest
balances first (this is the ladder method of debt repayment) or paying
off smaller balances first (called the snowball method, because you
build momentum). Either way, you’ll be moving in the right direction.
#3 Ask for lower rates.
Most credit card companies will lower interest rates when asked,
especially if you mention a “hardship plan.” Lower rates mean your
payments go more toward principal instead of interest.
#4 Send extra payments.
Make at least the minimum payment each month on every account, but
send that extra amount to the chosen payoff account. As soon as that
debt is paid off, put its payment and the extra toward the next account
on your target list.
#5 Stick to the plan.
It can be tempting to use your credit cards again once the balances are lowered, but that will only make it harder to get out of debt, and the process may take much longer. Resist the temptation and keep your eyes on your long-term goal.
For more tips you can trust, visit www.bbb.org.
NOTE: ClearPoint Credit Counseling Solutions is a nonprofit organization offering budgeting, housing and credit counseling services in all 50 states. ClearPoint is a member of the National Foundation for Credit Counseling, and is a BBB Accredited Business and a BBB National Partner.