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Are you determined to begin the 2019 paying down your debts? Or maybe you want to make 2019 the year you finally get out of debt for good. If so, we want to help you beat debt this year.
So how are we going to help you eliminate your debts in 2019?
Let’s start with these five simple debt elimination strategies inspired by the “snowball technique.”
Getting Started with Debt Relief
The snowball technique is still one of the most popular, and effective, debt elimination strategies. But it’s anything but simple. The five steps outlined in this article help simplify that strategy, and help you reduce your debt, remember to make your regular payments, and put you on the road to financial recovery and debt-free living.
Strategy #1: Transfer balances to a low or zero percent interest credit card.
Take out a new card with a great balance transfer offer. Transfer as much of your credit card debt to this card as possible. And then stop using it.
At the same time, place your other credit cards in a safe place, like a safe deposit box. Why? So you you won’t be tempted to use them.
You can also freeze your credit cards in a block of ice. By the time it thaws, you’ll have a chance to think about whether you really need to make that purchase on credit.
Strategy #2: Negotiate with your creditors to lower your interest rate.
Still have some credit card debts you were not able to transfer? Not able to open a new balance transfer card?
Then let’s work on reducing the interest charges on those debts.
If you don’t have the type of credit score (720 +, typically) that will qualify you for a zero interest credit card, it pays to call your creditors and negotiate an interest rate decrease.
Some companies, like Chase, have changed their policies to prohibit this type of negotiation. But other major credit card companies will still let you speak to a U.S.-based, human representative to make your case for a lower interest rate.
Before you negotiate, obtain copies of all three of your credit reports. If the information on it in the past 12 months is favorable, you can use this to make a strong case for a lower interest rate.
Strategy #3: Set up automatic bill pay so you never miss a payment.
If you want to get out of debt faster, one way is to avoid finance charges, late fees and damage to your credit score because you missed a payment. So now is the time to set up automatic payments.
Often, you can get an interest rate decrease, too, by agreeing to sign up for automatic bill pay, where payments are deducted from your checking account on a specific day each month.
Strategy #4: Round up.
When you make your payments each month, round up to the nearest dollar or nearest $10 increment.
Even paying a few pennies more than the minimum payment due can make a difference, and it shows up on your credit report as “paid more than the minimum,” which doesn’t directly affect your credit score, but gives anyone reviewing your credit report a warm-and-fuzzy feeling about your ability to repay debts.
Strategy #5: Use windfalls to pay down your credit card debt.
When you get any extra money — a gift, a tax return, a bonus at work, side work — use it to pay down your highest interest credit card.
If you get a raise at work, take the extra money and put it toward your highest interest or lowest balance credit card.
Paying off any credit card — even if it’s only got a few hundred dollars on it — is a tremendous psychological boost that will show you these debt elimination strategies really work, so you’ll keep going to pay off your debt by the start of 2018.
By now, you might be wondering if these steps alone can get you out of debt. Maybe you feel your problems are too big.
If that is the case, just think as these tips as a start. And then spend some time learning more about the snowball technique and stacking technique to find even more creative ways to beat debt.