This concise guide outlines why you need to reduce debt to get your finances in proper shape, and the best strategies to do it.
It all seemed so promising when those pre-approved credit card offers began to show up. “Wow,” you thought, “I’m qualified for a card with a $25,000 credit limit? I’ve arrived!” However, rather than arriving on Easy Street, it turned out to be the Boulevard of Broken Dreams. A couple of years later, that card was maxed out. The insane minimum payment did nothing to reduce the balance— as it only serviced the interest—and you’re now in the fast lane on the highway to Insolvency. Clearly, repairing your finances, starting with strategies to reduce debt, is in order.
Why you need to reduce debt
As good as it felt to acquire that card with the huge limit, seeing it charged to the hilt feels just as bad. What’s more, if things devolve and you can no longer afford the minimum payment, collection calls will have you avoiding answering the phone, looking at your email and responding to text messages.
Beyond that though, outsized debt limits your ability to make decisions, take advantage of financial opportunities and make ends meet—even when you’re making a good salary. Saving for a home or retirement, let alone a vacation, are all completely off the table. With the majority of your cash going to service debt, life isn’t fun and the future looks grim.
Further, if you’ve fallen behind, the hit your credit score has taken can make it difficult to rent an apartment, get insurance—or even land a job.
It’s time to stop
Sometimes, when faced with overwhelming debt, people start using credit cards like checking accounts. They’ll pay just enough into the card to give them room to charge the following month and pay that off again. Ironically, if they’d taken this approach from the beginning—and never let their cards hit their limits—they wouldn’t be in trouble. But now, it’s just digging the hole deeper.
At some point, you have to reduce debt: you simply have to break the cycle and let the chips fall where they may. Here, however, rather than suggesting you walk away from your obligation, we’ re saying it’s time to put a plan into play to reduce debt and clear it up. It’s time to start building your future, rather than feeding someone else’s. In other words, it’s time to stop charging—period.
Where to get debt relief to reduce debt
If you’re already struggling to make minimum payments, odds are the typical “find extra money in your budget to pay down your debt” ideas probably won’t work. Things are already stretched as thin as your elasticity will allow.
When this is the case, your best option might well be a debt settlement program. Also known as debt negotiation or debt relief, you’ll repay your debts in multiple payments, the total of which are significantly less than the actual amount owed. Here are some options for debt settlement loans if you decide to go that route: https://www.crediful.com/best-debt-consolidation-loans/.
However, rather than paying creditors directly, you’ll make deposits into an FDIC-insured escrow account you control. When there is a sufficient amount of money in the account, professional negotiators will work with your lenders to reach agreements to lay your debt to rest. When these agreements are reached, you’ll approve them before the funds you saved are disbursed to the creditor as payment.
Be careful though
There are those who would deign to profit from your misfortune and feel no remorse about leaving you in an even deeper hole as you try to reduce debt. Posing as authentic settlement firms, they’ll guarantee success for you to reduce debt. They will also try to sign you up as quickly as possible—often over the phone or the internet—without even assessing your situation. They might even tout miracle government plans to reduce debt, designed to completely eliminate your debt.
Meanwhile, legitimate debt relief companies do exactly the opposite. They are also accredited by organizations like the American Fair Credit Council and others. They’ll also have positive endorsements, like this Freedom Debt relief review. Repairing your finances, starting with strategies to reduce debt, can get you back on the right road to a bright financial future. When you do, you’ll feel much better about yourself and the world.
