Credit card debt is now $1 Trillion, don't fall into a 50-year debt trap like everyone else.
Making more money won't fix bad spending habits either, here are 10 tips to get out of debt & improve your credit score:
Making more money won't fix bad spending habits either, here are 10 tips to get out of debt & improve your credit score:
1) Use the Avalanche Pay-off Method:
The avalanche method involves paying off your debts in order of highest interest rate to the lowest rate, regardless of the balance
This will help you save money on interest over time, and pay off your debts more quickly
Math doesn't lie
The avalanche method involves paying off your debts in order of highest interest rate to the lowest rate, regardless of the balance
This will help you save money on interest over time, and pay off your debts more quickly
Math doesn't lie
2) Avoid Debt-Fueled Lifestyle Inflation:
Lifestyle inflation is when you increase your spending because your income increases
As you pay off debt, it's important to avoid the temptation to increase your spending
Instead, invest enough of your income to build wealth over time
Lifestyle inflation is when you increase your spending because your income increases
As you pay off debt, it's important to avoid the temptation to increase your spending
Instead, invest enough of your income to build wealth over time
3) Live a little more frugally:
Make changes to your lifestyle to reduce expenses so you can allocate more money to paying off debt (such as cooking at home, cutting back on entertainment)
Being frugal can help you build wealth because you are being more resourceful with money
Make changes to your lifestyle to reduce expenses so you can allocate more money to paying off debt (such as cooking at home, cutting back on entertainment)
Being frugal can help you build wealth because you are being more resourceful with money
4) Consider a Debt Consolidation Loan:
If you have multiple debts, consider a debt consolidation loan, which can combine all your debts into a single payment at a lower interest rate.
This can simplify payments and potentially lower interest rates.
If you have multiple debts, consider a debt consolidation loan, which can combine all your debts into a single payment at a lower interest rate.
This can simplify payments and potentially lower interest rates.
5) Negotiate Lower Interest Rates:
If you have high-interest debt, call your lender and ask for a lower interest rate
If you have a good payment history and are in good standing with your lender, they may be willing to lower your interest rate
Everything in life is negotiable
If you have high-interest debt, call your lender and ask for a lower interest rate
If you have a good payment history and are in good standing with your lender, they may be willing to lower your interest rate
Everything in life is negotiable
6) Track Your Spending:
Keeping track of your spending can help you see where your money is going & identify areas where you can cut back on spending to free up more money for debt repayment
A budget ensures that you're living within your means & investing enough for retirement
Keeping track of your spending can help you see where your money is going & identify areas where you can cut back on spending to free up more money for debt repayment
A budget ensures that you're living within your means & investing enough for retirement
7) Increase Income & Make More Than the Minimum Payment:
Consider ways to increase your income, such as taking on a side hustle or selling unused items
Paying more than the minimum payment on your debts can help you pay them off more quickly & save money on interest over time
Consider ways to increase your income, such as taking on a side hustle or selling unused items
Paying more than the minimum payment on your debts can help you pay them off more quickly & save money on interest over time
8) Avoid Impulse Purchases:
Impulse purchases add up quickly and make it more difficult to pay off debt
Consider waiting a day or two before making a purchase to see if you still want it (to avoid impulsive spending)
Impulse purchases add up quickly and make it more difficult to pay off debt
Consider waiting a day or two before making a purchase to see if you still want it (to avoid impulsive spending)
9) Credit Utilization makes up 30% of your score:
The easiest way to raise your credit score is by lowering credit utilization.
You can boost your score by using less than 30% of your total credit line.
Asking for higher credit card limits can help with this.
The easiest way to raise your credit score is by lowering credit utilization.
You can boost your score by using less than 30% of your total credit line.
Asking for higher credit card limits can help with this.
10) Hard Pulls:
You can build credit by limiting βhard pullsβ
Applying for credit cards hurts your credit score if lenders do a hard-pull
Hard pulls reduce credit scores by a few points. A hard pull will affect your credit score for ~3 months
Only do soft pulls if you can
You can build credit by limiting βhard pullsβ
Applying for credit cards hurts your credit score if lenders do a hard-pull
Hard pulls reduce credit scores by a few points. A hard pull will affect your credit score for ~3 months
Only do soft pulls if you can
A) Debt can rob you of your future because you are using the money you earn today to pay off things from your past.
Debt hurts your ability to invest in your future.
Create generational wealth, not generational debt.
Debt hurts your ability to invest in your future.
Create generational wealth, not generational debt.
B) Debt can be good or bad depending on how you use it and the terms of the loan.
When used recklessly, debt can spiral out of control and lead to financial difficulties such as high-interest rates, late fees, and damaged credit.
When used recklessly, debt can spiral out of control and lead to financial difficulties such as high-interest rates, late fees, and damaged credit.
C) Pay off high-interest consumer debt before investing.
Debt interest is certain, but investment gains aren't.
Returns on investment are uncertain but interest payments on debt are certain.
You can't out-invest a 25% interest rate on a credit card.
Debt interest is certain, but investment gains aren't.
Returns on investment are uncertain but interest payments on debt are certain.
You can't out-invest a 25% interest rate on a credit card.
D) The higher your credit score, the more likely you will be approved for a mortgage
Your score helps lenders assess how much of a risk you are, in terms of paying back your line of credit
If you are high-risk, you will have a hard time finding a lender to let you borrow money
Your score helps lenders assess how much of a risk you are, in terms of paying back your line of credit
If you are high-risk, you will have a hard time finding a lender to let you borrow money
E) Get your credit score in order. Having a good credit score makes life easier & will save you thousands in interest (when you borrow money)
The higher your credit score, the more likely you'll be approved for a loan.
The higher your credit score, the more likely you'll be approved for a loan.
Your choices today will determine your lifestyle in 10 years so make the right ones. These threads take time to write so if you found it helpful:
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