How to Pay Off Debts Quickly: Part 1

There are many reasons why people get into debt, such as medical emergencies, unexpected expenses, and job loss. According to a survey conducted by The Pew Charitable Trusts, over 80 percent of Americans have some type of debt. It’s no secret that many people have difficulty living with their debt.

Unfortunately, many people get into debt due to their lack of knowledge about how to pay off their debts and avoid falling behind. This is why it’s important that they learn how to pay off their debts and create an effective plan to achieve their goals.

Know What You Owe

Even though it may seem daunting to start paying off debts, it’s important to keep in mind that the total amount of debt that you have is very important. Having a clear understanding of how much debt you have will allow you to create a repayment plan that works.

According to Andrea Woroch, a consumer finance expert, many people have multiple credit cards. Understanding the total amount of debt that they have across each card, and other outstanding loans is very important to start paying off. Having a clear understanding of how much debt you have will allow you to create a repayment plan that works.

This can be done by creating a spreadsheet or using a free app that will allow you to keep track of all of your credit card transactions.

Read the Fine Print

After you have determined the total debt you have, it’s important to start reading the fine print. There are several details that you need to know about each of your debts, such as the due date, minimum monthly payment, and interest rate. These details will help you determine the best possible repayment plan to knock out that debt as quickly as possible.

The minimum monthly payment that you have to make on your credit card is the smallest amount that you can afford to make each month. Most banks calculate 1 percent of the total balance to determine the minimum payment. Interest rates can have a big impact on how you tackle debt repayment–a higher interest rate will make debt harder to pay off over time, so knocking those out first can be a great way to start!

These two steps will set the foundation for your debt payment plan. Take time ensuring all of your information is accurate and organized, and then check back for part two where we’ll explore how to make a plan and stick to it!

This post was originally published on Etienne Kiss-Borlase’s Finance Blog. For more info about Etienne, please visit his homepage.

How to Pay Off Debts Quickly: Part 1

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