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In this article, we will look at some concrete steps you can take to find out all the debt you owe and get a plan to pay it off.
Debt can come in many forms so it’s important to know all of the debt you have, whatever types they may be.
Next important thing is to have a plan. Without a plan to pay it off it’s possible that your debt will only get worse and you’ll continue to be stuck paying interest forever.
Figure out how much debt you owe
You wouldn’t believe how many people don’t do this and continue blindly paying off any bills that come in with no strategic plan. It’s one of the worst credit card mistakes. This is exactly what the credit card companies want, because you’re essentially just dumping money into their pockets. One of the most important credit card rules is to keep track of your balances (aka your debt).
You can’t make a plan to pay off your debt until you know exactly how much you owe. It might be painful to learn the truth, but you have to bite the bullet. Then you’ll see that it’s not hard to end this bad habit.
In fact, you can get the credit card companies to help you: Look at the back of your credit cards for their numbers, call them, and put their answers into a simple spreadsheet like this one.
How Much Do You Owe?
| Name of Credit Card | Total Amount of Debt | APR | Minimum Monthly Payment |
Congratulations! The first step is the hardest. Now you have a definitive list of exactly how much you owe.
What Debt Should I Pay Off First
Not all debts are created equal. Different cards charge you different interest rates, which can affect what you decide to pay off first.
There are two schools of thought on how to go about this. In the standard method, you pay the minimums on all cards, but pay more money to the card with the highest APR, because it’s costing you the most.
In the Dave Ramsey snowball method, you pay the minimums on all cards, but pay more money to the card with…
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