Financial Freedom by Organizing Your Debts

February 20, 2007 by admin
Filed under: Debt Consolidation 

Recent figures from the Federal Reserve, the agency that keeps track of money in the United States, indicates that Americans owe more than two trillion dollars on their credit cards. The national credit card debt amounts to more than seven thousand dollars for every man, woman and child in the country. The staggering amount of revolving debt in this country affects everyone, but what can be done about it?

Here are several tips that should help you get a head start on managing your debts:

  • Organize your debts – Take stock of every single credit card or other revolving obligation that you have. List them by according to the interest rate, from highest to lowest, and make a note of how much you owe. The interest rate is important; it represents the cost of continuing to owe money to that particular creditor. You want to pay down your debts by clearing off the loan with the highest interest rate first. Pay as much as you can to the highest interest lender and make minimum payments to the others. When the highest interest debt is gone, repeat with the next one on the list.
  • Negotiate lower interest rates – Call your lenders and ask them if they will lower your interest rate. It is expensive for credit card companies to find new customers; they would much rather keep you than try to replace you. Many credit card companies will occasionally agree to lower interest rates for their customers who are in good standing. If they agree to lower your rate, you have saved some money. Be sure to keep paying on time, or they may raise your interest rate again.
  • Pay cash when you can – It’s easy to use a credit card; much easier than paying cash. Get in the habit of writing a check or paying cash instead of reflexively using the credit card. Give some thought to not spending money at all if you can’t really afford it. Remember, a credit card purchase is a loan, not a gift of money. Use your cards wisely, and if you can’t do that, don’t use them at all.

    • A large part of the battle for financial independence is getting organized. In order to get your finances in order, you need to organize them, reduce costs when possible and make sure that you avoid trouble in the future. Financial freedom is hard work, but well worth it.

    ©Copyright 2007 by Retro Marketing. Charles Essmeier is the owner of http://www.Retro-Marketing.com, a firm devoted to affiliate marketing, and http://www.Debtmender.net, a site about debt consolidation, credit reports, personal bankruptcy and credit cards.

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