Perhaps you spend like there is no tomorrow. And your online shopping binge has racked up a great deal of money at a frightening interest rate. Maybe you have so little money that you can barely keep your head above water.
Don’t fret. There is a way out.
To bail you out of the situation and give your financial health a good spanking, follow these steps.
Assess the Extent of Financial Damage
So, you had amassed a whopping amount of debt including credit card arrears. A lot of people do not what to do to improve their situation from that gaping chunk of red ink.
The first step is figuring out your contribution to reduce that massive chunk of debt. Work how long it would take to clear your own debt. Don’t settle yourself for clearing the minimum due. Banks cynically calculate the minimum payment level so that you only get to chip away a small portion of the actual pile of debt. Repaying just the minimum payment is a very expensive option, which is exactly what the banks want you to do.
Surf for Credit
Check if you can make use of any balance transfer options that banks toss to customers to win them over. If you get such an offer that comes with no strings attached, try to grab it. Tread a careful path and do not fall prey to the common marketing gimmicks the banks employ.
Hop from one credit card provider to another as the current offer comes to a close. But make sure you close off every credit card before you go for another one. Remember the game plan is to get debt-free no matter what you want to do with the balance transfer credit cards.
If you are thinking about exploiting your existing skills, it is not a bad time to start a business on the side. Several agencies are ready to offer clear your own debt and help you focus more on the business and less on the startup capital.
Put a Working Plan in Place
So, you have transferred the balance successfully. Well, you can heave out a sigh of relief. Not quite! You will be back to square one in a matter of 6 to 12 months if you do not have a plan.
Plan things out and try to take advantage of what you have done so far. Aim to finish repaying your debt within that time. You do not have much time left before the interest rate boomerang comes back on. Set up a standing order (automatic payment) or see if you can set up a direct debit. Many of us cannot roll in a lot of money to get rid of our debt in one go, but we can surely free up small sum of money to make some regular inroads into that colossal amount of debt.
So, focus on making a serious dent even if you cannot eliminate your debt completely. Perhaps, a good financial plan will give you the much-needed wiggle room to sort out other issues, which may be financially pressing. Even if you are mired in debt, you can cut it up without any difficulty, as long as you have a solid financial plan to turn to.