What is the Best Way to Lower Debt?

21
September

Finding yourself heavily in debt is a stressful and frustrating situation for anyone. When you have a credit card of more than one, it can be difficult to manage your spending in a way that is beneficial, which can lead to a high debt that you may find difficult to pay back. However, in this scenario, all hope is not lost as you can work to lowering your debt. The best ways to do this should be taken seriously so that you can alleviate your financial burdens.

The first thing you should do when you are heavily in debt and want to reduce it is to stop using your credit cards. Continuing to use them when you go shopping is highly detrimental and if they are within your reach, you will be tempted to use them. Put them away or even cut them if you feel the need.

You can also take things a step farther and call the credit card companies and request a reduction in your interest rates. Chances are good that the creditors will refuse to do this, but do not feel discouraged. Continue calling all of the credit card companies by whom you have a card as one might give you a different answer.

One of the best things you can do to lower your debt is to request an advance on your salary at work. If your employer is an understanding type of person and you have a good relationship with him or her, this is a great way to relieve your financial situation. It could really help you to pay off your debt and you can repay it back to the company by having them deduct a certain amount of money from your paycheck thereafter until it is completely paid back. When you use this method of reducing your debt, you may even find your interest rate lowered on your credit cards, which is a great perk.

Debt consolidation is another good option you can take advantage of when you want to lower your debt. When you use this service, you are paired with a professional counselor who will work to consolidate the debt you owe to all of your creditors into a single payment. The counselor will work with creditors to devise a debt management plan — also referred to as a DMP — so that you will be required to make a single payment that will often include considerably lower interest rates. You will have to pay back the amount to the debt consolidation company and your counselor will then handle the payment and deal with your creditors. This can greatly help as it will lessen your burden quickly and not have as big an impact on your credit report and score. However, you should always be wary of the company you enlist for help and ensure that it is reputable. Many debt consolidation companies are also nonprofit but will charge a fee.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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