Getting out of debt is challenging, but it can be accomplished with dedication and perseverance.

The toughest part is changing your attitude about spending money, using credit cards, and disregarding the future.  Nothing is easy, but it is possible to get out.  Even small steps make a difference . . . make a plan and attack your debts!

Instructions on how to get out of debt

• STEP 1: Cut up your credit cards except for one or two to use for emergencies. Throw away the pieces.
• STEP 2: Cancel all of your credit lines and request a lower interest rate on the debt you have left.
• STEP 3: Transfer as much debt as possible to the credit card that has the lowest interest rate, or get a debt-consolidation loan from a bank at a lower rate.
• STEP 4: Use cash for all your purchases, and only buy what you can afford.
• STEP 5: Commit to start paying off your debts one at a time and do it. Pay off the credit card and loans with the highest interest rate first.
• STEP 6: Double your payments on the next debt by taking the payment you made on the first debt and adding it to the current debt.
• STEP 7: Triple your payments on the next debt by combining payment amounts. Continue until all your credit cards and other debts are paid off.

Tips on staying out of debt

- Invest in personal finance software to accurately track your spending and identify problematic habits.
- If you have investments that are paying 6 to 10 percent but a credit card debt with an interest rate of 17 to 21 percent, cash out your investments and pay off your debt.
- Ask your creditors how much repayment is needed before they are able to send a favorable report to credit agencies. Sometimes they will accept less than your total.
- Stay on top of your credit report and credit score – the higher your credit score, the lower your interest rates can be.
- Understand why you got into debt. You have to change those behaviors permanently before you can solve the problem.
- Come up with some new sources of income.
- If you must have a credit card, use a prepaid credit card so that you know you will have a limit.

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1. How to Erase up to $2M in Debt Tax Free – How The Mortgage Debt Forgiveness Act Works
2. How To Handle Debt Collector Calls
3. Get Out Of Debt In 2010
4. 10 Ways to Beat a Credit Hangover
5. 8 Ways to Boost Your Credit Score

Tagged as: Credit, credit card, credit report, credit score, Debt, Debt Consolidation

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