Three Tips to Overcome Personal Debt

We hear a lot about debt these days, including credit card debt, housing debt, debt from student loans and a lot more. We’re all recovering from the housing bubble of the 2000’s that brought an inflated sense of prosperity to our economy, and an era of very easy debt that made it easy to get in trouble financially. Unfortunately the heightened sense of easy money affected our society as a whole, and brought on a kind of euphoria about getting a lot of credit and spending more than we should.  Now that the bill is due, many people are heavily in debt and working their way out of it.

We’re now living in a new economy, with much tighter bank lending rules and tighter credit all around. In the new economy, a hangover from the past decade, many people are trying mightily to get out of debt so they can begin saving and make up for losses they experienced from the stock market crash and other losses from the economic downturn.  Getting out of debt can be challenging, however, when banks charge fees and high interest rates on top of what is already owed. Now, the big issue is how do you get out of debt responsibly, and quickly, given these challenges. Here are a few suggestions for getting out of debt:

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Stop Using Credit Cards

It seems so simple, yet many who are heavily in debt people scratch their heads and wonder why they can’t get a handle on their finances—even while they continue to borrow using credit cards. The best way to pay down credit card debt is to stop using the cards, and pay off the cards with the highest interest rate first. Eventually, you will get yourself out of debt this way.

Use Balance Transfers

Many credit card companies will offer a zero percent balance transfer to customers in good standing. Used responsibly, a balance transfer of this type can help you get out of debt by paying off higher interest credit card debt, and transferring the balance owed over to a zero interest account. This is a good way to manage debt and avoid paying high interest to a bank—without paying off the principle amount owed.

Get a Personal Loan

Another way to get out of debt is take on a personal loan, for example, a personal loan from Plain Green Loans, to pay off a debt in full, and then assume installment payments to pay off the new loan. If you are able to pay the new loan off at a lower interest rate, or over a shorter term, you may save yourself a good amount of money, and lower your personal stress in the bargain.

Yes, debt is difficult to deal with, but it can be managed and paid off, when faced responsibly.  The sooner you deal with a debt problem, the happier you and your family will be.