By Deanne Gage
The word “debts” has undoubtedly become a “dirty word.” Consider these four suggestions and take action.
The word “debts” has undoubtedly become a “dirty word.” Are you having difficulty meeting your financial obligations each month? These four suggestions can help you reduce your debt and ultimately eliminate it.
Consolidate your debts
Do you pay interest on the balance of several credit cards and loans? Call your bank and ask that they consolidate all these debts into a personal line of credit (PCL) or an all-in-one account with lower interest rates. While the interest rate on a credit card is usually 18% and that on department store cards 30%, the interest rate on a personal line of credit is substantially lower. Rather than making payments for three different credit cards, you’ll only make one monthly payment in your MCP while lowering your interest charges.
Jim Yih, a financial educator from Edmonton and the author of the blog Retire Happy, suggests that the only viable solution to eliminate your debt as quickly as possible is to make more payments of a higher amount. He adds that you can use a loan calculator to determine how long it will take to reduce your debt to zero. “Calculate the loan amount over three years, five years, or ten years,” he explains. “Many people are amazed at how high the payout amounts can be.”
In debt, are you living beyond your means?
