7 Quick Wins To Pay-Off Debt You Can Do Today

7 Quick Wins To Pay-Off Debt You Can Do Today

Reading Time: 5 minutes

When you’re under a mountain of debt, you know precisely how Atlas felt with the weight of the world on his shoulders! Whether it’s credit cards with sky-high balances, medical bills from an accident, or neverending student loan payments, it can be challenging to see the light at the end of the tunnel. 

 

But fear not! We’ve put together a few steps for you to make some quick win towards paying off your debt fast because it can be done!

 

What actually is debt, anyway?

While this may sound like a silly question, it’s really not. We want to be crystal clear with what we’re talking about when it comes to paying down your debts. Essential bills like electricity, water, and utilities aren’t considered debt, and neither are expenses like insurance, taxes, groceries, or childcare costs. 

 

On the other hand, anything that you owe to someone else is considered debt. For example, a car loan or student loan are both debts, because you owe money to someone else for purchasing either your vehicle or education.

 

To get a good idea of what your total debt looks like, add together the amount outstanding for the following non-mortgage bills:

  • Student loans
  • Car loans
  • Credit cards
  • Medical debt
  • Home equity loans
  • Payday loans
  • Personal loans
  • IRS and government debts

 

7 Quick Wins to Pay Off Debt Now

Once you have a full picture of what your debt situation looks like, you can start planning on getting rid of it! Here are some quick ways for you to start digging out of the red.

 

 

1. Stop Using Your Credit Cards

Logically speaking, the first step to getting out of debt is to stop adding to it! With credit cards, the more you use them, the higher your balance (and the more debt you go into). Nip your credit card usage as much as you can – entirely, if possible.

 

If:

You have any subscriptions, like multiple streaming apps that are automatically taken from your credit card, take inventory of what you’re actually purchasing. 

Every dollar counts, so reducing those expenses can make a big difference. 

 

Also, be mindful of how often you eat out and shop – you’d be surprised how much you can actually save when you really understand your spending habits!

 

We can understand if reducing credit card use isn’t realistic for everyone. However, you should at least avoid leaning on credit card “perks,” like the ability to take cash advances. These transactions usually come with a higher interest rate than purchases made with your card. 

 

Avoiding these can help keep money in your pocket by avoiding those sky-high interest rates.

 

2. Pay Off Debt with the Highest Interest Rate First

This method of paying down debt is called the “Avalanche Method.” In this case, you organize your debts based on how high the interest rate is, and start paying off the balance that has the highest rate.

 

By taking on your highest interest rate first, you actually end up keeping money in your pocket. The longer it takes you to pay off a debt or loan, the more interest you end up paying in the long-run. 

 

Once you’ve paid off one credit card or bill, you can roll that payment into the next debt obligation. By attacking your outstanding debts with a logical plan like the avalanche method, you’ll actually pay less over time.

 

3. Pay More Than the Minimum

If you really want to make a debt in your debt, you’ll need to start paying more than the minimum balance. As it stands, if you continue only to pay minimums, you’ll end up paying more over the long run thanks to interest rates, and it only prolongs your payoff strategy. 

how to pay off credit debt

When you only pay minimums, your debt can grow to where your minimum payment is only ever covering the accruing insurance, not so much the actual balance of your debts. 

 

Instead, try to make payments weekly instead of monthly or doubling the minimum payment if you can afford it. By concentrating on paying more each month, you’ll be able to really start digging away at the principal amount you owe.

 

 

4. Consider Balance Transfers

If you have a credit card or debt that has a sky-high interest rate, you may be able to save money by transferring that balance to a different credit card with a better interest rate or even zero-interest. 

 

Many credit card companies offer incentives for new account holders like a certain period where your balance doesn’t gather interest. 

 

If you’re confident that you can pay off a high-interest card in a few months, it’s worth considering opening a new account and transferring the balance to take advantage of the promotional offer. If you do this right, you can actually end up saving hundreds of dollars in interest!

 

5. Think About a Side Hustle

If your budget is pretty stretched already, and you’re struggling even to make minimum payments, it might be a good idea to look into getting a side hustle to generate a debt payoff fund. 

 

The gig economy has grown tremendously over the past few years, and it’s pretty easy to pick-up a flexible side job to generate a little more income. 

 

From driving for rideshare companies, delivering for Postmates, or freelancing on the weekends, you can make a little extra money on the side to put towards your debt. 

 

Even if you can bring in an extra $200 per month that you can put towards one of your high-interest debts, that’s $200 closer to getting out of the hole! 

quickly get rid of debt

 

6. Sell Unwanted Valuables

If your schedule doesn’t permit a side hustle, take a look at some of the things in your home that you no longer need or use. You can make some pretty decent money selling these items to others. 

 

For example:

That designer handbag that you had to have from two years ago could bring in some extra cash if you sell it to a consignment shop. 

 

Or that Tiffany necklace you got years ago for Christmas may be discontinued, and a jewelry shop would love to get their hands on it for their inventory! 

 

We’re not suggesting you gather all your favorite things and sell them, but more often than not, we have items sitting around the house that we don’t use. Why not clear out your space and make some extra cash to put towards financial freedom on something that was just sitting in your closet?

 

7. Know When to Ask for Help

Sometimes, no matter how many strategies you read and tips you try to implement, the debt is just too much for you to get a handle on. In these situations, you should know when it’s time to ask for help from a credit repair company

 

With the knowledge and expertise on helping thousands of people get their debts under control, a debt repair company can help you put together a payment plan that fits your needs and budget. 

 

In fact, when you work with a credit repair company, they can often get you out of debt quicker than if you did it by yourself! 

 

Paying down your debts may require a few lifestyle changes, but it doesn’t have to be depressing. Focus on the end goal: the freedom you’ll feel walking around life without that massive weight on your shoulders! 

 

With a few simple steps and a bit of willpower, you’ll be well on your way to living a life of financial freedom and out of the red for good!

7 Strategies for Dealing with Debt Collectors

7 Strategies for Dealing with Debt Collectors

Reading Time: 5 minutes

You owe money, you’re late on your credit card payments, and you feel like you’re walking around with a permanent stress-induced headache. What’s more, you have debt collectors calling you about the unpaid credit card debt, past-due student loans, and medical bills. It’s enough to make anyone spiral into an anxiety-filled black hole.  

 

How does someone even begin to deal with the debt collectors – especially when they seem to be ever-present, following you around like a shadow? Our first piece of advice is to avoid debt collectors all-together. According to credit repair Dallas experts, if you know that you’re making your way into troubled waters with your debt, it’s best to try to work out a deal with the original creditor before letting a third-party get involved. 

 

Below are some tips to help you navigate these murky waters. 

 

First Off, What Are the Types of Debt Collectors?

To understand how to deal with debt collectors, you must first know the different kinds that exist. Here are the types of debt collectors you may deal with: 

 

  • Internal Debt Collectors:
    • These are the collectors that work for the company you owe money to.
    • They don’t collect debts from others.
    • These “first-party” debt collectors do not follow the same rules as others.
    • Working your debt out with them can prevent your debt from being given to the credit bureaus, which would ultimately hurt your credit score.  
  • Collection Agency:
    • A collection agency gets involved when your lender cannot work a deal out with you.
    • Collection agencies charge the lenders a fee to collect any unpaid debts.
    • Collection agencies will be relentless when it comes to collecting your money because they get paid based on the amount of money they collect.
    • Collection agencies have to follow stricter rules when it comes to collecting money from you.
  • Debt Buyers:
    • Lenders that have failed to collect a debt will cut their losses and sell the debt to a debt buyer.
    • Debts are bought up for pennies on the dollar.
    • A little amount is paid because they know that they will not be able to collect most of the debts that they purchase.

 

Now that we’ve delved into the different kinds of debt collectors, let’s review how to deal with debt collectors.

 

 

The Seven Steps for How to Handle Debt Collections

It’s Important to Know Your Rights 

In the midst of your panic, you may not realize that just because you owe a debt, does not mean you don’t have rights. The Fair Debt Collection Practices Act provides a detailed outline of your rights, including how a debt collector can and cannot interact with you. No matter what, harassing phone calls and threats, as well as abusive language, are all considered illegal.  

 

What can a debt collector do? They can:

  • Reach out to you at your home. They must clearly state that they are a debt collector.
  • A debt collector can charge you interest.
  • Unfortunately, they can take you to court.
  • They can seek payment for any old debts that you may have long forgotten about. 

 

What can a debt collector not do? They cannot:

  • Debt collectors cannot keep you in the dark.
  • They cannot simply contact you anywhere or anytime. 
  • Debt collectors actually cannot keep contacting you if you wrote to them telling them to stop. Don’t be harassed by debt collectors!
  • They also cannot pester relatives of yours.
  • A debt collector cannot pretend to be someone else. 

 

Don’t Ignore Debt Collectors 

When you do not have the financial means to pay back owed funds, it may seem easier to simply bury your head in the sand and ignore the calls and letters altogether. This is not something that is going to go away simply because you don’t want it to be real. By law, the consumer is allowed to send a written request for debt verification within thirty days of a debt collector contacting them.  

 

If you continue to ignore them, debt collectors can provide negative intel to consumer credit reporting companies, like Experian or Equifax, which can remain on your credit report for up to seven years. 

 

Know the Facts

You want to be well-informed, that’s how you avoid being taken advantage of.

 

Here are some facts you should be aware of:

  • The original creditor may sell your debt to a third party and then resell the debt again. When this happens, errors can occur.
  • Not that you will be shocked by this next statement, but debt collection practices are actually the largest source of complaints to the Consumer Financial Protection Bureau. What is one of the biggest reasons? Being asked to pay debts that person doesn’t actually owe. 
  • If you do not receive a validation letter within five business days of first being contacted by a debt collector, request one.  

 

Don’t Let Them Pressure You

It’s easy to feel intimidated by debt collectors. You virtually think it’s the end of the world. Just because you owe money, does not mean you should succumb to the pressure.

  • Don’t rush to make a payment just because a debt collector contacts you. 
  • You need to take time to think about your options before you jump into a contract.
  • When speaking with a debt collector, do not pay or promise to pay at that time. Also, do not give payment information to them. 
  • If you make a single payment, that is enough to get you in trouble with a debt collector.  

 

debt collectorHave a Written Agreement

Do not do anything before having everything confirmed in writing. Furthermore, have a representative of the debt collector sign said contract before any payments are made. You want to avoid misunderstandings. 

 

Communicate via Certified Mail

It is suggested that any correspondence that you have with a debt collector be done by certified mail. It is even suggested that you request a return receipt so that you have proof that your letter was actually received. You don’t want anything that can be used against you. Remember the point we made before – you have rights. 

 

Look into Hiring a Debt Management Company

As you approach this journey of dealing with a debt collector, you should consider finding an accredited counseling agency. This agency will work out a payment plan for your budget that does not have you scraping by and unable to put food on your table due to debt.  

 

We know that no one wants to deal with debt collectors. It’s not a fun time and it’s a source of immense stress. It’s easy to simply advise not to go into debt. But we know with rising medical costs, ungodly student loans, and credit card costs that were needed at the time of emergencies get in the way. If you find yourself in a situation dealing with debt collectors, there is a light at the end of the tunnel.

 

You can get back on your feet, you just have to take it one step at a time.

 

 

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