3 Debt Elimination Strategies- How to use Free Money to Reduce Debt

Here is article I found that provides 3 debt elimination strategies to eliminate debt using free money!

Free money is sitting in your finances now, just waiting to help you reduce your debt. Without paying more, you can get out of debt sooner by reducing your interest rates on debts. Using a payback credit card can also help you earn money. And finally, budgeting your purchases will help you stay on track to paying off your debt.

Reduce Your Interest Rates

Reducing your interest rates on short and long term debt is the easiest way to reduce your debt. You can transfer credit card balances for better terms. You can also opt to consolidate debt into a low-rate home equity or personal loan.

To get the most benefit of your freed up money, make the same payment on your debt. Making extra principal payments will help you trim your debt load in no time and you won’t feel a pinch in your finances.

While you have those accounts paid off, consider closing those accounts. Keep the oldest credit lines since they benefit your credit score. However, new accounts could needlessly be restricting your credit options in the future.

Get Paid For Using Your Credit Card

Credit card companies compete through their rates and incentive programs. With payback rates up to 5%, you can be earning extra dollars each month by paying your regular bills or buying groceries.

To get the most, use the card to pay for your everyday purchases. Then pay off the entire balance each month. That way at the end of the year, you will have a sizeable check coming your way. Take that free money to eliminate part of your debt principal.

Cash back credit cards usually have higher rates than other accounts. So if you are planning to carry a balance, shop for the lower rates.

Budget Toward A Goal

Trimming expenses from your budget can also help you find free money in your account. For example, late payments on bills are a needless waste of money. Switching to automatic payments can help avoid this cash loss.

When you do look at your budget, plan toward a pay off goal. How much money a month do you want to put toward your debt? Write that check at payday so you won’t be tempted to spend it. Then make the necessary budget adjustments, knowing that you are getting close to being out of debt.

See my recommended Debt Reduction Companies online.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

Article Source: http://EzineArticles.com/?expert=Carrie_Reeder

The 10 Commandments of Debt Elimination

10 Commandments of Debt Elimination ” Eliminate Debt Now”

1.) Thou shalt learn the difference between “needs” and “wants”.

2.) Thou shalt not use credit to purchase expensive toys.

3.) Thou shalt create a budget and debt elimination plan and stick to it.

4.) Thou shalt not covet they neighbor’s mortgaged-to-the-hilt McMansion, nor his soon-to-be-repossessed Mercedes, nor the 50′ inch LCD TV he will be paying off for 5 years at 25 percent interest.

5.) Thou shalt create an 6 month emergency fund and set aside money for it every month.

6.) Thou shalt not spend more than you earn.

7.) Thou shalt not live beyond your means.

8.) Thou shalt not open any new lines of credit.

9.) Thou shalt teach thy children from an early age how to manage money responsibly.

10.) Thou shalt not ever make late payments, because they will ruin your credit and take money out your pocket.

If you continue to adhere to these 10 Commandments of Debt Elimination, you will live a debt free life, and have total freedom over the major decisions you make.

3 Fool Proof Debt Elimination Strategies to Get You Out of Debt

Here some great debt elimination strategies I found on Debt Free Destiny that will help you eliminate debt. It basically points out three basic steps you will need to do to get out of debt.

There are three basic steps you’ll need to take to eliminate your debt.  The most important step can be accomplished starting right this minute, and will be the most important thing you can do to keep yourself debt free for the rest of your life!

Step One: Stop Using Credit, Stop Applying for Credit, Stop Generating New Debt

You might be surprised at the number of people who say they are trying to get out of debt yet they continue to pull out a credit card when shopping or paying for expenses, or who sign on the dotted line for financing furniture or any other purchase.  If you want to eliminate debt you have to stop using credit, it’s that simple.  You can’t get out of debt if you continue to add more debt.

Think you need a credit card for emergencies?  Think again – it’s probably those very credit cards that put you in this situation to begin with, and the fact that you used them for an emergency and now have that debt to pay back is why you don’t have money for the next emergency that presents itself.

Go through your credit card statements and find any recurring payments you’ve set up that use the credit card.  Gym memberships, Netflix, Gaming sites – anything that charges to the credit card automatically needs to be “turned off” at this time.  If you have to keep whatever service you were paying for on the credit card, have the bill sent to your home or have it deducted from your checking account. Stop using credit.

Contact your credit card companies and ask them to lower your interest or offer you a better deal on repayments.  It doesn’t always work but it’s worth a try.  Don’t cancel your cards though, as it can lower your credit score.  Keep them open – but don’t use them!

Step Two: You Need An Emergency Fund

When you stop using credit cards, you will need to have some money to pay for unexpected or emergency expenses.  The reason you may have gotten into credit card debt in the first place may have to do with an unexpected expense and a lack of savings – so you really need some money set aside to prevent this cycle from continuing.

Try to save about $1,000 as quickly as you can, while still making minimum payments to your credit cards and other debts.  Put the money in an account you can access fairly easily, but don’t tie it to the account you use all the time with a debit card or you’ll be tempted to use it.  Set aside $25 or $50 a week – whatever you can afford while making minimum payments until you have saved $1,000.  Cut back all unnecessary expenses (eating out, gym memberships, new shoes, etc) until you have this emergency fund established.

Step Three: Have a Snowball Fight With Your Debt… and Win

You’ve stopped using credit, you’ve got about $1000 saved in an emergency fund and now it’s time to eliminate that debt once and for all!  There are a few popular methods for getting out of debt – you can use the Dave Ramsey method of paying the smallest balance first to generate momentum, the highest-interest rate method to pay less in total interest, or the debt avalanche method, as coined by ConsumerismCommentary.com.

The most important thing you can do for your financial future is to eliminate your debt.  Start right now – don’t put it off like a diet during the holiday season!  The sooner you start, the faster you can make a difference to your financial situation.

How to Use Debt Elimination To Get You Back on Track

Debt elimination is a mandatory step to reconstruct your credit and enhance your credit worthiness scores. In our debt orientated society, taking a loan or credit card has become second nature to us, almost like brushing your teeth when you get up in the morning.

Acting like this leads directly to overspending and mounting of burden of debt. If you’re carrying a massive amount of debt, this will adversely have effects on your mental and physical condition. It will also end up destroying your credit score and put you in significant financial difficulty.

When it come to developing a debt elimination plan, you can do this on your own or get professional help from debt or credit counselor. This way you can get shot of your debt without taking a fresh loan for debt consolidation.

Another technique for debt elimination is by taking a debt consolidation loan. In this, you convert all your loans from the different banks and loan companies into one big loan with a lower interest rate. It’ll be better to repay one payment each month rather than multiple payments. Steadily it’ll help you to dump your debt. However, while doing this you cannot continue to use your credit cards recklessly because it will defeat the purpose of getting out of debt.

Hopefully this small debt elimination tip will help you get out of debt in a very short time, and get you on your way to financial freedom.

How to Eliminate Debt Without the Need to Consolidate Debt

Here’s a very informative debt elimination article I found on Ehow.com that talks about eliminating credit card debt without the need to consolidate your debts.  The article basically shows you how to get out of debt the old fashion way.

Thinking you might want to consolidate debt loans?  Need to put away your credit cards? There are good alternatives to debt consolidation. Unfortunately, just like W.C. Fields’ common sense cure for insomnia–get lots of sleep–many people offer equally simplistic advice about getting out of debt: just pay off your bills or consolidate debt loans (which only rearranges your debt and does nothing to pay it off.) It’s not that simple.

Getting into debt is easy. Getting out can be a struggle. We get into debt innocently enough. For some of us, we do so by design–to buy a new house or car or fund a coll ege education. For others, it is by accident–the transmission in the car fell out, the roof on the house fell in, or one of the household’s income earners was pink slipped. Then, of course, still others get into debt by mismanagement of finances–because they live beyond their means or just can’t resist taking advantage of every cent of available credit.

Here is a step by step way to get out of debt.

Step:1

Stop accepting a minimum level of debt in your life. Many people have a comfort zone of acceptable debt. When the amount rises above some arbitrary figure, we cut back temporarily, only to resume normal spending later. That’s why some people carry thousands of dollars of credit card debt for years–paying a small fortune in interest each year–because it never occurs to them to pay it off, put away the plastic and start using cash.

Step:2

Pinpoint your position. Excluding mortgage, determine how much you owe between cars, credit cards and other debt. At the same time, calculate how much discretionary income you have to begin whittling away at your debt load.

Step:3

Map out your debt-elimination strategy complete with a Zero Debt Day to celebrate your freedom from debt. Base your plan on three factors: time, discretionary dollars and total debt.  For instance, if you owe $2,000 and can allocate $100 a month exclusively to debt reduction, you’ll be debt free in around two years, depending on interest.

Step:4

Stop adding new debt. Too often, we pay off one bill, then pick up new debt in the process.

Step:5

Adopt a cash-only policy, and put the credit cards away.  If money is tight, put off that new car for another year and put what would have been your monthly car payment to reduce your debts.

Step:6

Don’t be too easy on yourself. Be willing to do what it takes to get out of debt ASAP. Consider this: If you allocate $500 a month to debt reduction, when you’re finally free and clear you’ll have $6,000 additional cash a year for lifestyle enhancement or to send ahead for retirement.

Step:7

At the same time, avoid bread-and-water austerity. If you make yourself miserable, your plan will fail. Consider splitting discretionary cash in half–part for debt elimination; part for living (and playing) expenses.

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