Paying On
Your
Own
Pay On Your Own
As much as we all would prefer to handle things on our own, there are times in our lives when we all need some help. When you’re trying to get out of debt on your own, it can be an overwhelming task that often leads to a dead end for consumers. To start, you need to know how to pay off credit card debt. The interest rate on a credit card balance is usually between 10-30% (APR). These high-interest rates can be very costly and make it difficult for people to pay down their debt in a reasonable time. Most consumers can afford only to make their minimum payments, so it can sometimes take over a decade to pay off your debt.
It’s no wonder many people need help getting out of debt. If you were to fall behind on the accounts it gets even more difficult to get back on track. Your creditors will increase your rates and tack on late and over-the-limit fees making it impossible for someone facing a hardship to catch up. Unfortunately, most people choose to do nothing and hope things will get better. This can be very expensive. Eventually, your debts must be handled.
Steps to tackle your debt on your own
Create a Budget
Sit down with pen and paper, or at a computer with a spreadsheet and create a simple budget detailing your monthly income and each of your monthly expenses. This will give you a starting point to see what you have at the end of the month to put toward your debt
Develop a Strategy
After creating a budget, make a list of each debt. Write down the creditor’s name, balance, and interest rate. Then, use a debt calculator to see how long it will take you to pay off your debt by only paying minimum payments. Then calculate how long it will take if you increase your minimum payments to the maximum amount that your budget will allow.
Plan Of Action
Now that you have a clear picture of your debt and how much you can realistically pay on your own, decide on a method to pay down your debt as quickly as possible and maximize your savings
Some Methods Of Paying Down Debt On Your include:
- Debt Snowball Method List your debts from smallest to largest. Focus on paying off the smallest debt first while making minimum payments on the others. Once the smallest debt is paid off, move on to the next smallest, creating momentum as each debt is cleared.
- Debt Avalanche Method List your debts by interest rate, from highest to lowest. Prioritize paying off the debt with the highest interest rate first while making minimum payments on the others. This method can save you money on interest over time.
- Balance Transfer Credit Cards Transfer high-interest credit card debt to a balance transfer credit card that offers a lower interest rate or a 0% introductory APR. This can help reduce the amount of interest you pay.
- Consolidation loans Take out a consolidation loan to pay off multiple debts, combining them into a single debt with a lower interest rate. This can simplify payments and potentially reduce the amount paid in interest.
For more information on the best way to get out of debt — including debt settlement — turn to the experts at Optimal Debt Solutions. Get a Free Consultation
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