how to: get out of debt

If you’re ready to get out of debt and boost your fiscal fitness, you’ve come to the right place. Staring at that huge stack of bills, fielding the unpleasant phone calls -- even just knowing you’re in the red can really drag you down. Luckily, we’re here to help you get back up! We have tons of advice for getting out of debt, including credit card debt help and an easy-to-use debt calculator to help you pay off debt. You’ll also find debt advice on how to renegotiate your credit card debt and ways to improve your credit (even before you’re out of debt!). Not sure where to begin? Why not give our 7 simple steps to getting out of debt at try -- they will definitely help you find your financial footing. Tackling your debt as a twosome? We’ve got plenty of debt advice geared toward couples. Learn about financial basics for newlyweds, including how to choose the right bank and when to merge your accounts. Peek into real couples’ budgets and see how they fixed their finances. And if you’re wondering where to find all that extra money to pay off debt -- don’t worry, we’ve got that covered too. We have debt help and cash-saving secrets from financial pros, and the money tips that spending savvy couples must know -- plus saving secrets from fellow Nesties. Finally, check out our tips to help you stay out of debt for good -- set up a household budget, plan your paychecks, and get credit smart.

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7 Simple Steps to Get out of Credit Card Debt

Learn the 7 simple steps of credit card rehab.

Photo: Veer

If you're struggling with debt, clearly you're not alone. Being debt-free takes resolve and a little know-how. We'll help you get on the right track, starting with these seven steps.

Step 1: Separate "Bad Debt" and "Okay Debt"
How can you tell the difference? "Okay debt" has an interest rate under 10 percent -- preferably with tax advantages to boot. In the best-case scenario, the thing you bought with borrowed funds will appreciate in value (think mortgage and even that student loan). "Bad debt" is everything else -- especially credit card debt.

Step 2: Don't Pay by Their Rules
The "minimum amount due" is cleverly calculated to keep you beholden to The Man for your entire adult life. A $4,500 balance on a card with an 11-percent APR will take 44 years to pay off, even if you don't put another dime on the card. Oh, and the interest you'll pay on that loan? A whopping $17,000! That's why you're going to pay by your rules. Keep reading.

Step 3: Get Intimate With Your Visa
Gather your bills and clear a space at the kitchen table to line them up. Rank your cards from the lowest to the highest interest rate. Identify the one major credit card with the lowest annual interest rate and room for a balance transfer. See which high-interest rate cards you can phase out of your life and move to the low-interest card.

Step 4: Play the Heavy With Your Existing Lenders
Grab a bill from any account charging you more than 19-percent interest and ask to have your rate lowered. Say you've received offers for much lower-rate cards. Your lender would rather keep you as a customer than pay $50 to $200 to find your replacement. Plus, studies show that more than half of the customers who tried to negotiate lower interest rates had some success.

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Use our Get out of Debt Checklist to help!


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