Lots of people struggle to save up money and budget properly, and this can quickly result in credit card debt. If you have credit card debt, you’re not alone; credit cards are the most common source of personal debt in the US. This is partially because it is fairly easy for people to get into credit card debt; people can apply for a new card even if they have bad credit, and the high interest rates can make it harder for people to pay off their debt. Thankfully it is entirely possible to clear your debt – you just need to follow three important steps. Here are three tips to help you clear your personal debt.
Assess The Situation
The first thing that you need to do is sit down and calculate exactly how much you owe and who you owe it to. Many people with debt aren’t fully aware of exactly how much they own (plus interest rates), and this makes it easier for them to convince themselves that their debt is manageable. However being aware of your debt will make it seem more real – and it will also be much easier for you to create a realistic repayment plan. Start by adding all of your debt together, including car loans, which are fairly common; in fact, 9% of US homes have auto loan debt.
Identify The Problem
If you are not clearing your debt it is likely that you are not earning enough or not saving enough. This means that you could spend years paying high interest rates without ever clearing your debt, so you need to sit down and really think about why you are struggling to pay off your debt. Maybe you need to save more or reduce your spending, but either way there will be a change that you need to make if you want to start significantly reducing your debt.
Consolidate Your Debts
There are over 1,000 million credit cards in the US, and lots of people have multiple credit cards with different debts on them. This means that people are spending lots of different interest rates, which can be very expensive – but you can take out a personal loan to consolidate your debts, meaning that you only have to make one monthly payment. This makes it easier to pay off your debts, and as you only have to pay interest for one loan it can be much cheaper.
It is entirely possible for you to clear your debt; you just need to create a realistic plan and stay motivated! This will make it much easier for you to reduce your debt with every month.
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