Use these 5 ways to live debt free.
High interest credit card debt can be renegotiated with your credit card company. You can call your credit card company and negotiate a lower interest rate. If your company refuses you can threaten to transfer your balance to a lower interest credit card. Many times this will make the company grant your request. Credit card companies do not want to lose your business to a rival company. If that doesn’t work then transfer the balance to another card with a lower rate. High interest automobile loans can be refinanced at your local credit union in as little as nine months. Lowering your interest rate from 18% to 8% is the same as receiving a 10% return on your money. It allows you to keep more of your own money.
2) Live within your means.
Attitudes and habits that condone overspending can really hurt your future goals of achieving financial security. Habits such as spending money consistently on new clothes, shoes and jewelry. You would be surprised at how quickly entertainment expenses such as buying movies, music, going out to eat add up. Always having to have the latest car for example can also hinder your ability to save. These types of habits will keep a person debt ridden for years. Too many Americans already live paycheck to paycheck. It is critical to adopt the perspective of having your money work for you. Whenever you save, your money is earning interest and working for you. Whenever you are spending, you are working for your money. Always remember that just because you have the credit to pay for something does not mean that you can afford it.
3) Never pay the minimum.
Paying only the minimum will keep you in debt for years. It also ensures that you will pay thousands of dollars in interest to your credit card company. For example, if an individual with an $8,000 credit card balance at an 18 percent interest rate makes only the minimum payment. It will take him over 30 years to pay off the balance. Paying an extra $20 or $30 per month can greatly reduce your balance over time. Remember that you only agree to pay back the principal when you borrow money; never the interest.
4) Watch out for hidden fees.
Lenders make a fortune by charging fees to consumers for any violation of the account agreement. These fees are typically located in the small print of your agreement. Companies charge fees for late payment, overdrafts, account maintenance, inactivity and more. Be sure to read your agreement carefully to avoid hidden fees. One late payment can change your interest rate to the highest rate allowed by law.
5) Create a safety net.