Getting into debt is kind of like jumping into a pit full of snakes. You know you may be in trouble but it will be some time before you know how much trouble you’re really in. This means the best solution to debt is simple – stay out of it. Here are five strategies that could help you do just that.
1. Charge only what you can afford to pay off each month
It’s okay to use credit cards so long as you don’t charge any more than you can pay off when your statement arrives. That $100 coat might look very appealing but when your statement comes in, will you actually have the $100 to pay for it? It’s important to pay off your balance each month or you will start accumulating debt, which can be a fast slide into debt hell.
2. Have only one credit card
If you have multiple credit cards, shred all of them except for one. If possible, use that one card only in case of an emergency. If you do use it to pay for purchases, see strategy #1. As an alternative to shredding those other credit cards, you could hide them or give them to a friend or relative to keep for you. Whatever you do, don’t close those accounts. While closing a credit card account might seem like a good idea, it can actually reduce your credit score.
3. Watch your spending
The one thing that gets people into problems with debt more than any other is impulse purchase. If you’re not willing to create a complete budget, at least make a list of those things that you absolutely must pay for such as rent, auto insurance, food and the like. Then try to not buy anything that’s not on your list. No matter how tempting that new smart phone might be if it’s not on your list of “must haves”, don’t buy it.
4.Forego those deferred interest credit cards
Apple, Amazon.com, Wal-Mart and many other companies offer what are called deferred interest credit cards. These can seem very attractive because they allow you to charge an item and not pay any interest on it for anywhere from three to six months. You need to shun these cards because if you don’t pay off the entire balance before your period of deferred interest ends, you could be slapped with an interest rate as high as 29% on the entire balance owed.
5.Don’t fall for department store cards
When you make a purchase at the typical department store, you’re almost always offered some special deal like “open our credit card today and I can save you 20% on your purchase”. This is another type of card to shun. Why? Because if you don’t pay off your entire balance the month you receive your statement, you could be slammed with a very high interest rate that will just add to your debt.
If you haven’t been able to stay out of debt
I understand it’s hard to stay out of debt, especially because of the past holiday season. If debt has gotten the better if you, there are some good options for dealing with it. You could get a debt consolidation loan, go to a consumer credit counseling agency or try debt settlement. This is where you contact each of your creditors and negotiate settlements where you pay less than you actually owe but pay off the settlements in lump sums.
If you’re not a good negotiator
You need to be a pretty good negotiator to do DIY debt settlements. And, of course, you need to have the cash in hand to pay off your settlements. These are reasons why many people turn to us to do the debt settlement for them. Call our toll-free number today to learn more about debt settlement and how it could help you.