Currently, the U.S. Consumer debt is at 13.86 trillion dollars. The citizens of the nation are drowning in debt. And this is holding many Americans back from reaching a secure financial situation in life. Author and businessman, Ronnie F. Lee writes about the debt crisis in his latest book, Know Money No Problem (ISBN 978-1952263583). The book serves as an effective guide to money management, especially at a time when the country’s economy is recovering from coronavirus. The U.S. has become the epicenter of the pandemic and millions of Americans have lost their job during the lockdown. Debt has been piling up for those who have no sort of income; specialists have recommended people to avoid paying their debts in the current situation.
For Americans with stable incomes, paying off your debt should be the top priority. According to Focus Financials, here are two ways you can start clearing your debt out:
- Knock Out & Repeat
As you begin your fight against debt, stay committed until the end. As you pay off one credit card, lump all the money you were using to make payments to that card on to the next debt payment. Resist the temptation to use that money elsewhere in your budget. By drastically increasing your next debt payment, you reduce the length of time it will take to pay it off. This “snowball” method is widely used and incredibly effective to tackle debt.
- Decrease Your Interest Rates
There are a number of ways you can lower the interest rates of your debts, and this will allow your payments to make more of a dent in your overall debt amount, rather than go towards interest. Here are some ways to try to minimize how much interest you’ll pay over time:
- Interest Rate Negotiation—If you’ve been a loyal customer who consistently pays on time, talks with your creditors about if they’d consider lowering your interest rate. It’s worth a shot!
- Debt Consolidation—Instead of having several high-interest debts, you may qualify for a debt-consolidation loan with lower interest. This is a powerful debt-fighting tool that will allow your payments to work harder at cutting through the debt much faster. Plus, you won’t have as many monthly payments to remember.
- Balance Transfers—You may qualify for a credit card with a 0%-introductory or promotional interest rate that you can use to transfer your debt balance. Though most credit companies charge a nominal fee for balance transfers, it’s still likely to save you money in the long run because you’ll save so much on interest and make serious strides within that 0%-interest-rate period. Imagine if you could wipe out your debt within that interest-free promotional period in the current economic problems—bye, bye debt!
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