Whats the best way to get out of debt....?

Question

I only have about $12,000 on credit cards and and have reg. bills like car, rent, insur., gas, and food....My monthly is only 2,400 before taxes.

Answer 1

First, make a list of all your outstanding debts, and the interest rates you are being charged. The one that has the highest interest rate ... that's the one you want to pay off first (assumption is that none of your debts has interest that is tax deductible). Make minimum payments on the others.

If you can consolidate your debts, and lower the interest rate, do that. Ask your bank for help on this.

You need to make out a budget. If your monthly income is $2,400 before taxes, you probably take home about $1,950. Do a budget of what your expenses are (car, rent, insurance, gas, food and entertainment). Stick to that budget, use the take home in excess of expenses to pay off your debt.

Answer 2

My God, I don't know how you ever got into this kind of a mess, but man, you have got to smarten up.
So much for this little lecture. The immediate concern is to get creditors off of your back, and to avoid paying all of the heavy interest rates that you are charged. This is a 2 fold situation that you should do. First off, you need to increase your earnings, and by that, find yourself a 2nd job. The next thing to do is to concentrate and to pay off your bills. Since you have a stack load of bills, and you are paying a vast amount in high interest charges, and this is with the assumption that you have steady employment, and that you are credit worthy, go to the bank and apply for a CONSOLIDATED DEBT LOAN. Rather than paying interest rates of at least 15%+, you will find that the bank will charge you an interest rate of around 8%. Your monthly payments, based on a 48 month loan should be around $450,
At the same time, do not be a fool and charge and spend on any stupidity. Just remember that if you want to buy something, pay it with your cash, and not with your lousy charging; otherwise you will never get out of this hole that you are in. The important thing now is for you to have learned from your lessons.
Good luck, and remember to learn from your mistakes. Nobody is perfect. The idea though is learning from your mistake so that this mistake will not be repeated!

Answer 3

The answer is simple but tough: Earn more and control spending. Start working on the question of how you can earn double your current income over a set period of time. While you are figuring that out, put a spending freeze on your budget. Only food, shelter, and paying your current debt payments are allowed. Everything else is out. Start saving a small amount of money every month into a savings account and use that for the holidays or emergencies. If you can restructure your debt so that you pay a lower interest rate, that would help, but don't put too much time into that. Instead, put your focus on earning more and spending less. Sell anything you don't use anymore.....or gift to charity. Good karma can't hurt either!

Answer 4

It sounds like the best thing is to get another job for the evenings and weekends, and then put every single dime of it towards the credit cards. Skip lunches out, don't take extra weekend trips, don't buy anything you don't have to have.

You can probably pay them off fastest by paying the minimum balance due on every one except the card with the lowest balance. Then pay as much as you can towards that one. When that is paid off, cancel the account, and start paying all you can on the next lowest balance, until you work your way through the stack of them. It's not easy, but it can be done.

Finally, try calling the card companies and telling them that you are tryint to pay the debt off, but it's not easy. Ask if they can reduce the interest rate. Some may, some may not.

Good luck!

Answer 5

First of all, no one should use a credit card if they can't pay it off as soon as the bill comes in so you don't get nailed with the huge interest rates. I would get a part time job to pay off the credit cards. Next I would say if you can't save 10 to 20 percent of your pay, you are living too high. The reality is you may have to live in a tent for awhile.

Answer 6

Credit cards feel good and u can spend but u regret later.
Get a cheap loan and pay all off and then pay off the loan. Meanwhile cut the plastic devils in half and learn your lesson. You will have to cut back for possibly 3/4 years but its a hard world and what you buy now you have to pay for later and nothing comes free.

Answer 7

Cut, cut, cut! Define what is a necessity and what is just something you absolutely don't need. A period of sacrifice will ultimately get you out of debt or close to it and you will be able to maintain your funds more effectively when that load comes off your credit history and your back. Be practical. Look where you can save, sometimes looking around for better deals will save you tons of money. Don't go out to eat. Don't make unnecessary indulgent purchases. Put signs around your home reminding you of your plan. Pay off those credit cards first because interest is a b*tch.

Answer 8

First, cut up all of your credit cards. Then if you don't want to get a debt consolidation loan you can pay minimum balances on all of your cards except one that you will focus on paying off until it's completely paid off, then move onto the next one. Start with the biggest bill and move your way down.

Answer 9

Plan your budget. Decide how much you will pay each month on the credit cards etc. and don't incur any more debt. You may have to cut back on expenses that you can control....lower the thermostat for heat, no fast food, don't buy impulse items.

Answer 10

First you have to stop spending money on imprudent thing. Then, put aside a certain percentage of your weekly pay for your bills.
This is not hard to do.