According to the Quarterly Report on Household Debt and Credit, credit card balances increased by $10 billion from the previous quarter. This indicates that debt is increasing more and more. Being debt free does not come through an increase of debt, but rather a decrease in debt.
What's one of the largest issues with credit card debt? Usually, if you are either a first-time borrower or a borrower with bad credit, the borrower has a high interest rate. Consumers who do not follow a budget will most likely pay high interest charges and over time get into a position where they are unable to pay back the money borrowed on the credit card. They then open another credit card and the viscous cycle continues until they end up in collections.
Without an effective budget, consumers end up paying more interest than needed. Interest is just putting your hard earned money into the pocket of someone else's. So, what are some steps you can take to help get out of credit card debt and back on the path to financial freedom?
1. Ask lender to get your credit card rates lowered.
Sometimes all you need to do is call up the lender and ask for a lower interest rate. Sometimes you will qualify, and sometimes you won't, but if you don't ask, the answer's already No. Sometimes they will lower your interest rate by 5% and that could mean thousands of dollars in saved interest over the life of the debt. If you pay your bills on time you're most likely to qualify for a rate reduction.
You can also do a balance transfer from a higher-interest card to a lower-interest or zero-interest card. Be sure to take into consideration the balance transfer fees to determine if the transfer is worth the cost.
2. Order cards and pay them one-by-one
Order your cards by interest rate, with the card that has the highest interest at the top of your list. Start paying the minimum on all of your other credit cards while putting as much as you can towards your highest rate card along with your discretionary funds. Once you have paid off the highest-rate card, take the payment that was going towards that card and apply it to the next highest-rate interest card, and continue doing that one by one, until all the cards are completely paid off.
Using a debt-elimination calendar, such as the one shown below, can help eliminate your credit card debt.
Account consolidation is another way to reduce amount of money paid towards interest over the life of the debt. Although there may be fees associated with this option, it is an option if budgeting seems too difficult and if the option of only making one payment with one interest rate sounds easier to manage. If you're ready to consolidate your loans, request a free debt analysis today.
Once you have either lowered your interest rates, or consolidated your debts, or are in the process of eliminating your debt with a debt-elimination calendar, it's time to put together a plan.
Getting out of debt is like starting an exercise program. It doesn't sound all that difficult to do. I mean, you just start exercising, right? Doesn't sound that hard. What happens when you first start exercising though? Your muscles feel weak the next day, you sometimes feel like you're going to die, and you now all of a sudden have to start eating healthy so you don't negate the effects of your exercise program. In all reality, maintaining a regular exercise program is a lot more difficult than it seems.
The same is true with getting out of debt. I mean, all you need to do is spend less and save more, right? All you need to do is pay off your debt. That doesn't sound so difficult, right? Well, as many are aware, including myself, paying off debt is a lot more difficult than it seems. I mean, it takes discipline and actually maintaining a budget to really get those debts paid down.
Personal money management is important but how does one go about doing it on their own? How does one become a pro at managing money? Do you think it's possible to become a pro all on your own?
Think of the professional athletes and workout instructors. Did they become pros all by themselves, or did they have a mentor along the way? The Worth Account is like having a personal money manager. It gives you the tools you need to not only maintain a budget, but give you the direction to paying off your debt in mathematically the fastest way possible. The Worth Account is the greatest investment you can make.
If what you're doing now is not getting you to pay off your debt in the quickest way possible, then doesn't it make sense change what you're doing? I've tried many of the "solutions" out there, including credit card consolidation, mint.com, readyforzero.com, plus many more. All these have some great features to them, but the Worth Account has been the most effective system I've used for paying down my debt, and doing it in 1/2 the normal time.
If you're struggling with using cash advances to pay for living expenses, using credit to pay for things that you would normally pay cash for, digging into your savings to pay for bills, paying one credit card with another, or applying for credit cards with zero interest rates and then transferring the balances to reduce interest, then the Worth Account is definitely for you!
The program is very user-friendly and I'm confident it will be the best investment of your lifetime. Be sure to watch the videos to learn more.
So, this is my first attempt at documenting my own personal experience using the Worth Account. I have actually owned the Worth Account for over six years, when the company was known as United First Financial, and have been using it to pay off my debts ever since. I don't own a home, but I recently payed off my 2010 Nissan Cube which had an original balance of $21,000. I originally had a 6 year loan and payed off my $12,000 balance earlier this year, being 2014. I I payed off my vehicle roughly 2 years, 6 months earlier than expected. I also personally know others who have used this program to pay off debts and pay down mortgages.
I have used other financial services before such as Quicken's debt reduction planner, mint.com, and readyforzero.com. These are all free services, but they are free for a reason. All of them offer great tools and help educate people on how to manage your money and loans and is helpful at teaching the user how to save money, but the one thing that it didn't do as effectively as the Worth Account is tell me exactly how to pay off my debt in mathematically the fastest way possible.
All of the programs I have used use what's called the "Snowball" effect. Paying high interest is always a big problem, and although the other services can tell you how to eliminate credit card debt, it does not tell you how to do it as quickly as possible. The snowball effect basically takes your smallest debts and eliminates them first. Once the smallest debts are paid off, the money that you were putting those debts are then added to the payment on the next smallest debt, and so on, until all the debts are paid off.
The problem with this solution is that it is not taking into all the variables. It doesn't take into consideration the interest rate, the length of the term, all of the other accounts' and their variable terms and put it all together along with your income and expenses. I mean, there are experts out there that offer varying solutions to paying off debt. Some say that you should target your debt with the lowest balance and pay it off with the extra money you have left over each month. Other experts say that you should take your highest interest rate debt and pay that off first.
Why do all these experts have different opinions? Isn't money just math? I mean, interest rate is a number, debt balance is a number, length of term is a number, etc. Determining the fastest way to pay off debt should simply be math! Calculating all the variables while determining which debt to target first is simply math. What is awesome about the Worth Account is that the software has an algorithm to do just this. It uses advanced banking strategies to determine the fastest way to eliminate debt and while saving interest. Like other services, the program is in the cloud, so there is no software to download and you can choose to have your transactions updated so that they reflect your financial activity, keeping your information up-to-date.
The program really is like a GPS. When you get off track, it navigates you back on track to get to to pay off your debt in the fastest way possible. When a GPS recalculates due to a wrong turn, it doesn't take you on the longest path to your destination but puts you right back on the fastest route back to your destination. The program works like a GPS.
I've been using it for a while now, sometimes regularly, and sometimes not, and each time I stop using it, I regret not using it consistently because it really does help me keep a budget. It's like having a monthly budget planner and is the best budgeting software I've ran into.
I hope you join me as I document my experience with the worth account as my wife and I work towards paying off a $45,767.16 debt in just 4.0 years with only $80 in monthly discretionary income!
Be sure to check out the videos to learn more and either contact me or request your FREE debt analysis!
Shane D. Sorensen, MBA
Hi. Thanks for checking out my blog! I decided to blog my experience with the Money Max Account while offering other helpful, financial advice. I hope what I share proves useful.