Financial Freedom by Organizing Your Debts
By: Charles Essmeier | Posted: 20th February 2007
Recent figures from the Federal Reserve, the agency that keeps track of money in the United States, shows that Americans owe more than two trillion dollars on their charge cards. The astonishing amount of revolving debt in this country affects everybody, but what can be done about it? The total U.S. bank card debt amounts to over seven thousand dollars for every person in the country.
Below are a few suggestions that should help you with regards to managing your debts:
Organize your debts - Take stock of every single credit card or other revolving loan that you have. List your debts according to the interest rate, from highest to lowest, and make a note of how much you owe. Knowing the rate on your debts is crucial; it signifies the cost of continuing to owe money to that creditor in particular. You want to pay down your debts by clearing off the loan with the steepest interest rate as soon as possible. Send as much as you can to the highest interest lender and make smaller payments to the others. When the debt with the highest interest is gone, start over with the next one on the list.
Negotiate lower interest rates - Call your lenders and ask if they will lower your interest rate. It is costly for charge card companies to find new customers; they would prefer to keep you than replace you. A lot of credit card companies will consent to reduced rates for their customers who are in good standing. If they agree to lower your rate, you have saved some money. Be sure to keep paying in a timely manner, or they may raise your interest rate again.
Use cash when you can - It's easy to use a credit card; much easier than paying cash. Start a habit of writing a personal check or paying with cash instead of reflexively pulling out the credit card. Give some thought to not spending money at all if you cannot really afford it. Remember, a credit card purchase is a loan, not a gift. Make use of your bank cards wisely, and if you cannot do that, don't use them at all.
A large part of the fight for financial independence is becoming organized. To get your financial matters in order, you need to organize them, eliminate costs when possible and make sure that you avoid trouble in the future. Financial independence is tough work, but well worth it.
©Copyright 2007 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing , a firm devoted to affiliate marketing, and DebtMender.net, a site about debt consolidation and credit counseling, personal bankruptcy and other financial matters.
About the Author
Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to
debt consolidation, credit counseling, payday loans and personal bankruptcy and HomeEquityHelp.net, a site devoted to mortgages and
home equity loans.
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Tags: habit, thousand dollars, spending money, few suggestions, debts, trillion, lenders, timely manner, creditor, charge cards, interest rate, interest rates, federal reserve, revolving debt, personal check, bank cards, card debt