best way to get out of debt, when you can ONLY make MINIMUM payments?

Answer 1

You CAN'T. You must increase your income or lower your expenses. PERIOD.

Minimum payments will not pay off the debt for at least ten years. Get an extra job or a better job. Cut out some expenses. Do you have cable? Do you have a car payment? Do you eat out? Do you have a cell phone and a home phone? Do you pay for Internet service? Cut the fat!

Pay the minimums on everything and put every extra Penny you have toward the debt with the lowest balance. Once you pay that off, then roll that amount (the minimum and the extra you were paying) to the next highest debt. Continue this debt snowball until you have everything paid off.

www.daveramsey.com

Answer 2

I can't beat that first answer but I want to add: minimum payments are usually set so that you will essentially never be able to pay off the debt. The bank wants you to keep paying as long and regularly as possible, with as much of it going to interest and as little to principal as possible. Look at how much interest is being added to your debt each cycle, and how much of your minimum payment goes to interest... it ain't pretty. Sometimes minimum payments won't even reduce your debt at all, if the interest rate is high enough and you're dealing with a crappy bank.

I suggest you talk to your fairest creditors on the phone and ask them what kind of a deal they can give you on balance transfer. Transfer as much as you can from high interest accounts, to ones with the lowest rate of interest you can get them to guarantee you. Usually it's for a limited period like 9 months or a year and applies only to the transfer, so you want to transfer the amount you know you can pay off in that period -- but it can save you hundreds.

If you haven't been paying regularly for a long time, you may not be offered anything good, though. Best thing is to resolve to scrimp until you get out from under it. Remember, the more principal you pay, the less interest gets added on to your total debt each month, and the faster you pay it off! Once you get started seeing that balance drop, it becomes very motivating.

Answer 3

Call up your credit card companies and ask if they will lower your interest rate on your card. Most if not all credit card companies are willing to work with their clients. They would rather you pay off the card than them have to turn it over to a collection agency, then they get nothing at all.

That's your first step. Depending on how many cards you have, a lot of credit card companies offer no interest for one year if you transfer a balance, open up a new card, transfer your high interest rate cards over and pay on that card for the one year. If you've completely transfered the balance on some of your high interest credit cards, close them out and cut them up, you don't want to run them up again. That's the second step.

Lastly, if you have three cards you're paying in, pay one card off at a time. Pay three times the minimum balance on the first card and only the min amount on the last two. Throw money at the first card until it's paid of, then throw more money at the second card and pay the min on the third and so on.

If things get really bad, go to a credit card councelling company that will consolidate your debt and will work with your credit card companies. But word of warning, make sure your credit cards will work with the debt consoldiation companies by calling them and asking. Explain to them that either they do or you will be forced to file bankruptcy, trust me they don't want you to do that.

Answer 4

RickB has the right idea. My advice is to throw the extra money on the highest interest rate debt first rather than the lowest balance. You save more money on interest.

You can also increase your income by having a garage sale and collecting alum cans (a friend's nephew made $75). Pizza delivery has flexible hours and they always need drivers. Besides, you get free leftover pizza.

Answer 5

Opt for a debt consolidation loan: The easiest method of getting a debt consolidation loan is to utilize the equity of your home. Equity of your home is calculated and determined by the difference in the amount you have paid and the amount you owe. If the amount you have paid is more than the amount due, you can use it as collateral. This allows you to borrow money on lower interest rates. Besides, you also get tax benefit on this type of loan. Consult your tax advisor before opting for this loan.
http://debt-trap.com/category/Debt-Consolidation-Basics.html

Answer 6

learn to budget and do it.
pay food 1st , you'll live to work an other day.
pay housing 2nd , you'll live to work again.
pay utilities 3rd, you'll live comfortable than the street.
pay transportation 4th, try to downsize and stay real. cut off extra STUFF it is only temporary. Get TWO more jobs great place to go when in debt - to work.
visit daveramsey.com to learn the hard lesson easier way.
pay any extrra cash to smallest bill when finished with that attack the next smallest. pay min on all the rest - You will WIN this way. you eat an elephant same way one bit at a time.
get '48 days to work you love ' D Millar to learn to increase your financial wealth.
get ' financial peace revisited' read and ACT on both.
remember debt is the 21st century SLAVERY. paycheck to paycheck is not the way to go.

Answer 7

The only way is to cut back or sell off stuff or get another job.

Answer 8

Same position as you. making some extra money from my home computer by using this site
http://www.treasuretrooper.com/311316
try it, it's free, all you do is 5 minute (or less) surveys.