Debt Free Living in this Economy

[dollardaze]

It may not be easy, but we can live debt free in this economy, simply by following a plan. Here are some tips to get you debt free.

The first thing you need to do, is to quit buying on credit. This isn't as hard as you think - simply leave those credit cards at home and forget about having them. If you can't pay cash or by debit card, then you don't buy the wanted item until you can.

Make a list of the amount you owe on each credit card, list the interest rate and the minimum monthly payment required. Next to that list a larger payment amount that you can make each month. Each month, pay the fixed amount (the larger than minimum) that you've listed next to the card amount. As creditors reduce your minimum payment, keep paying the higher amount. As you pay off a card, apply that card's payment to the other cards listed.

Check out lower interest, or interest free cards and transfer your high interest debt to these cards, but read the fine print to see how long you will have to pay off the debt. Shifting your debt to one of these cards is best for those who can pay the debt off before the rate goes up. Be sure you always pay these on time as one late payment will likely push you into a higher rate.

Never borrow from one card to pay another.

Don't use home equity to pay off cards, as you may be tempted to run up debt on your cards again.

[moneysaver]

Also, I think if you do pay off a credit card, call them and ask them to cancel your card. When you are getting close to paying them off, call them and see what your payoff on the card is.

Then if you want to pay it off, and you don't need it anymore, cancel and cut the card up. That way you can't reuse it and get it back up anymore.

[Empty Wallet]

You are so right about closing the accounts. Me and my hubby got into credit card debt last year, we had one credit card that only had a 500$ limit on it, and by the time they got done with us, we were getting bills for over 1200$!

Thats because we went over a year without making a payment on this card, and every month they just kept adding late charges, over limit fee's and interest and this is what we ended up having to pay. It should be against the law! especially when you call them and explain your situation and ask them to close the account so you can pay off the bill, back when it was only 600$, and they refuse because your over limit and have a back balance, but what the hell, you are trying to tell them you are willng to pay off the bill as is, but can't afford for them to keep on adding thier "over limit fees" which we were never over limit, it was there fees that kept us over limit!....we tried so hard, but they refused until they got us up to 1200$ and then they close the account and wanted to make a payment arraingement with us then, !