Attack Your Debt!

You all have probably read somewhere that making minimum payments on your high interest debt will take forever to pay off. Unfortunately, this is very true, as interest rates will eat up most of your payment. In some cases it may benefit you to aggressively attack your high interest debt and eliminate it as fast as you can. This may take away from some of your savings but in the long run is going to save you more. So roll up your sleeves, get out your budget, and get ready to pay down that debt.

The very first thing you will want to do is to not add any more debt to your existing balances. The goal is to eliminate your debt quicker and completely so you can start to commit more money to savings.

You may need to take a look at your budget to find ways to apply extra money to your debt. Take a look at your savings, you may want to take some out of savings and apply it to the debt. It is still important to have money in savings for emergencies, but the money you are saving now will just be used up on the interest from other debt. The quicker you eliminate your high interest debt the more you can put into savings in the future.

*For example, you put $200 into savings each month and have a minimum credit card payment of $57.50 a month with a balance of $2300. With an interest rate of 18% it would take you 236 months (just under 20 years!) to pay off, and you would have paid $3,065.37 in interest. By taking an extra $100 from savings and applying it to the credit card payment (totaling $157.50) you will pay it off in 17 months instead of 236 and cost you $315.73 in interest. Now you can see why paying only the minimum is a waste of money. Even if you can only afford an extra $10 a month you will be saving yourself money. You can then use that extra amount to pay down other balances.

It is recommended that you attack the smaller balances first and then apply those savings to the next highest amount and so on.

There are many ways you can begin to attack your debt. You can make a one time lump payment that will shorten the repayment timeline. You can use savings from one part of your budget and apply the extra amount to a debt payment until it is paid off.

Those in a debt management plan can also make extra payments or apply more to their payments. By doing so you are shortening the period it will take to completely eliminate your balances.

Why not start with your tax return. In 2005 about half of everyone that received a tax return used it to pay down some form of debt. Instead of using it on convenient sales (that fall around the same time that many people receive their tax returns), use it to pay down your debt. You can spread it out among various debts or maybe even eliminate a specific debt. Even if your tax return won’t eliminate all of your debt it can pay a good amount down which is going to help you pay it off faster and save you money in interest. It is important to find out if the debt has any penalties for paying extra, and in some cases you may need to specifically ask for the extra amount to go towards your principal amount.

Did you recently get a raise? Why not apply that extra amount to a debt payment. It’s extra money that you have been getting by without previously and by using it to pay down your debt you will have that much more once the debt is paid off.

You may even want to consider an extra job or ways to earn extra income. A weekend or weeknight job can help eliminate debt fast. Even if it is only a couple of hours a week you can still add that to your payments and cut the time it takes to pay them off.

Summer is just around the corner. Why not take some of that unused stuff that has been sitting in your basement and have a yard sale. Team up with neighbors or a friend and try and make some extra money.

Trade in your vehicle for one with a smaller monthly payment. Now take the difference between the old and new payment and add it to high interest debt or apply it to the new car payment and pay it off faster.

Some of these tactics may seem overwhelming or extreme. These are suggestions that will eliminate your debt faster and improve your financial condition by improving your credit score and leaving you with more of your income to commit to savings.

Pioneer Credit Counseling is a bonded, non-profit credit counseling agency offering debt management programs, financial counseling, bankruptcy counseling and housing counseling nationwide. Call our friendly counselors today at 800-888-1596 or visit

Our accredited credit counselors will help you take control of your financial life and get out of debt faster than you can on your own. We offer a debt management program that will stop the collections calls, lower your monthly payment and provide you peace of mind. Our pre and post bankruptcy counselors provide an easy process for you so you can focus on rebuilding your financial being.

It is our policy at Pioneer Credit Counseling not only to help people get out of debt, but also educate in sound budgeting practices.

Pioneer Credit Counseling can help you get out of debt faster. Find out how through one of our Debt Management | Debt Management Programs | Credit Counseling | Financial Counseling | Housing Counseling | Bankruptcy Counseling | Financial Educational Materials

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Having Trouble paying your bills? Debt Management, financial counseling, bankruptcy counseling and housing counseling. Call 800-888-1596 Today!
Take control and eliminate debt. Debt Management, financial counseling, bankruptcy counseling and housing counseling. Call 800-888-1596 Today!

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