Creative Way to Get Rid Of Debts

viraj-kesarIf you are like many in today’s economic climate and are drowning in credit card and other debt and feel that no matter what you do it will never be at reasonable levels, then the time has come to get a little more creative in dealing with that debt.

There are ways to beat debt, especially credit card debt down that is quicker and more efficient than just paying the minimum balances every month. Quite obviously, the number one way is to pay more than the minimum amount necessary each month to beat it down quicker. While this is a great idea it will still usually take you a substantial amount of time to eradicate that debt if the balance is very high.

Another way to accomplish this goal is do what is coined as “snowballing” your credit card debt. What this entails is taking a debt load from one card and transferring it to the card with the lowest possible interest debt consolidation torontorate. Then, as you pay the minimum balances on all other cards you work as hard as possible to pay off the one with the highest rate until it is zero balance.

Then you start on the next card and again make minimum payments on all others as you “snowball” or aggressively pay off that card and then again move to the next. As the cards start to get paid off you will have more funds available to pay off the next one in essence gathering momentum hence the term “snowballing”.

You can also take advantage of any low interest promotional rates that are periodically offered by card companies. Even if the introductory rate is only for a year, you can make substantial gains and save a boatload of money in that period.

Other ideas for wiping out debt involve using other cash streams to apply to the debt even if it seems counterproductive. In certain cases it would make more sense to cash in investments or even use savings to pay off debt especially if the interest rate of the debt is substantially higher than what you are getting in return for those saving or investments.

debtsDoes it make sense to carry debt at a rate of 18% and have savings that are only offering only a fraction of that? In a sense by paying off that debt you are getting that rate of return on your money albeit it a slightly different way. The same idea would exist if you have an insurance policy that you are able to borrow against. The rate you will pay will be a fraction of the credit card rate saving you money in the long run.

As you can see, there are a wide variety of creative ways to finally off load that credit card debt. Use your imagination and do your best to beat it down and then implement planning to avoid building it back up again.