With the rapid use of different debt vehicles more and more people are facing debt challenges, some of the manageable limits and others beyond it. There is a level up to which you can handle debt, and you must stick to that specific limit but is you are not diligent towards it then you will find the mountain of debt to be growing at an alarming speed, and you pressed it. If an overload of debt is not addressed quickly, you cannot regain control of it all of a sudden. There must be a plan to do it and diligence to follow it as well.
Shrink Your Card Limit
Now and then you may receive calls for a pre-approved credit card. If you give into it, you are calling for trouble as more available credit means more expense. When you spend on your card, remember that you are unknowingly paying more as each card comes well equipped with different fees, rates of interest and options. It is a good idea to shrink your limit and maintain a couple of good cards only. It will prevent you from being tempted to spend over. Companies also increase credit limit from time to time seeing your repayment style which is also a ploy for you to give to higher charges.
Paying Off Debt
When you have too many debts to pay, you may not be able to decide which one to start with. In such a situation follow the thumb rule by paying off the debt which carries the highest rate of interest. It may not be the highest balance, but while paying off a debt and managing it at the same time, it is not the balance but the rate of interest of that balance which must be considered. It will help you in saving quite a considerable amount of money which you can channelize to pay off other debts having the next higher rates. But you must not ignore any debt while following this technique but make the minimum payments for all so that your debt does not keep piling up.
Keep A Track
It is crucial to keep track of your income, expense as well as the dues that you have paid up. It will help you to remember all the payments that you have to make and be prepared with the necessary arrangements made already. Keep a record of all payments and the amount you can afford that month to pay it off. If there is any shortfall, you can have time to make arrangements so that no due is left unpaid. If you find that paying different rates of interest to various creditors is cumbersome for you, then you can also consider consolidating your loans to a lower interest single loan and pay the others.
Some Other Ways
There are several ways to control and manage your debt. You can visit here to know about them all. A few other effective ways are to consider your payment options before taking up any new loan, enjoy the benefit of pre-payments if any, maintain a progress report that no payment is missed, reward yourself on achieving a milestone set by you and switch to debit card usage until all your debt is paid off.