How to Get Out of Debt - Do Not Pay the Minimum
Unfortunately, you cannot simply wish your debt away. No matter how good you are at avoiding the phone calls of creditors or how quickly you throw bills away, the debt that you owe will continue to linger and haunt you for years to come. The best way to handle your financial situation is to simply accept that it must be dealt with and to make the changes necessary in order to finally get your debt under control. Of course, the idea of tackling debt is much easier than the actual act of doing.
There are a number of steps you can take to get yourself on the road to financial freedom, but one of the most important involves the monthly payments that you are already making. If you are only making the minimum payment on your credit cards, you are not making any progress. The simple fact is that paying the minimum is exactly what your creditors want you to do. Doing this allows them to make more money on the interest being charged on the money that you owe and prolongs the agony of paying your debt off completely.
The minimum payment is generally only 2 to 3% of the outstanding balance owed. Aside from making very little headway on the actual principal, the interest that is being compounded every month will cause your overall debt to increase rather than reduce overtime. Although it may be difficult to do, paying as much as you can every month will have a real impact on the amount of money that you owe your credit card company. If it is at all possible, you should consider doubling the minimum payment. This means that if you owe a minimum of $100 every month, doubling that $200 will have a profound effect.
Of course, if you are like most people it may be difficult to come up with anything more than the minimum in order to start whittling away at your debt. This is where many individuals simply give up. The sad fact is that it will most likely be necessary for you to make a few sacrifices in order to come up with the extra money needed in order to make a real difference in your debt. Although it may be difficult to give up some of the things that make life comfortable in order to pay off debts, it will pay for itself in the long run.