While the cost of living continues to skyrocket and the dollar’s value plummets, paying down high interest debt has become a priority for everyone. Many people who have ridden the wave of false prosperity over the last decade are now experiencing out of control debt, that threatens their lifestyle and even the future of their children. High interest, such as that charged on credit cards, is of particular concern, since the debt being added to that already accrued, makes payoff seem nearly impossible. If you are trying to pay your way out of a high interest debt situation, don’t despair. Here are some strategies that can help you bring your debt load under control.
The first step to eliminating high interest debt, is to pick the bills that have the highest interest rates. Pay as much on these debts as you can, without forsaking your other obligations. Remember that you are already living above your means when you acquire revolving debt. Making a few sacrifices may be in order, to facilitate a larger payment each month.
If you have money in savings, use that cash to pay down your debt. Today’s return on savings and investment is minimal, at best, no matter where you put your money. Getting rid of your revolving debt will net you a safer and better return on your money.
Borrow from low interest sources. You may be able to get a better interest rate by borrowing against your home, your life insurance or from your relatives. You may even be able to transfer balances to your lower rate credit cards. A word of caution is in order here. If you decide on one of these methods, make sure to read the fine print. Tricky terms in your repayment contract can hobble your best efforts, if you’re not careful.