Tips on Debt Reduction Strategies

Tips on Debt Reduction Strategies

Tips on Debt Reduction Strategies

Filed under: Debt Strategy, Debt Settlement Advice and Information Blog, Blog

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Tips on Debt Reduction Strategies

Once you are over your head in debt, it is time to start coming up with some creative ideas on how to get that debt load reduced quickly.  There are some surefire debt reduction strategies.

Borrowing From Peter to Pay Paul

You have probably heard this phrase before. It means that you borrow money from one source in order to pay off your older debt. If you never plan to pay off Peter and plan to just go find another Peter, then it is a very bad idea. If you do plan to pay off Peter, then this is a very helpful strategy in the group of debt reduction strategies.

You can sometimes get a much better interest rate from Peter than you have with Paul. That is one very good reason to try this method. Possibly, if you can pay Paul a cash settlement all at one time, then Paul might accept that offer and give you a reduction in the amount you owe him. So, there are times that borrowing from Peter to pay Paul is a very good idea.  It isn’t always bad. It can actually come out to be one of the better debt reduction strategies.

In this scenario, Peter would be possibly a bank that offers consolidation loans, or Peter could be a company that does debt settlement. A friend or relative might also be interested in loaning you the cash at a small interest rate in order to pay Paul.

 

Underused Debt Reduction Strategies

One method of reducing debt load is often overlooked and it is so simple. You call your credit card company and ask them to lower your interest rate.  You tell them that you have a couple other credit cards that are giving you a far lower interest rate.  Say that you really like their credit card better, but you are going to have to move your balance to the lower interest rate credit card if they cannot lower your interest rate.  You’d be surprised at how many banks will lower that rate right then and there.

A favorite of the debt reduction strategies is to get a new credit card that offers a zero interest credit card.  Banks often issue this promotion to get their credit cards out there. Often this zero interest will continue for a year.  Aside from being a great way to pay on time with no interest, you can also move your high interest debts to this new card and get it paid down a lot faster.

 

You’re in a Better Position When You Start Sooner

When you first notice you are in a boat load of debt, this is the time to get serious about debt reduction strategies. Do not just tinker with it.  Right off, get a serious and intense plan worked out and stick to it. In this way you will not experience the pain of bankruptcy and drowning in debt. You will get a quick handle on your debt and get it paid off completely in what seems to be a rather painless event.

Written By : Dave Leuthold

Dave Leuthold is the Founder and CEO of Century Negotiations Inc. Dave has been an influential member of the debt settlement industry for over a decade and sits on the Board of Directors for the AFCC - the industry's leading regulatory council.

Dave has written 148 articles

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