if you’ve been making your minimum
monthly payments on time and have kept
your debt-utilization ratio low -- you might
qualify for a low- or no-interest balance
transfer. This offer will let you transfer your
higher-interest balances to a new card and
save on interest, making it easier and faster
to get out of debt.
“Try to find a promotion with a low rate
or no fee associated with the transfer,” says
Matt Freeman, manager of credit card prod-
ucts at Navy Federal Credit Union.
But if you make a late payment, you
could lose the low promotional interest rate,
Freeman cautions.
You should avoid making new
purchases on the card, because those may
not come with the same low interest rate,
Freeman says. Besides, continuing to use
cards when trying to pay down debt isn’t
a good choice. Put that card aside, make a
dedicated payment plan and stick to it.
Who this strategy is good for: Deter-
mined risk-takers.
4. GET SPENDING UNDER CONTROL
Sometimes people get into credit card
debt because of bad luck. They encounter
a health problem or get laid off and start
charging everything. Other times, the
source of the problem is chronic over-
spending, which often means you aren’t
really aware of how much you bring in and
how much goes out each month. To gain
that awareness, you need a budget.
Matt Kelly, owner of Momentum
Personal Finance Coaching in Durango,
Colorado, says he and his wife paid off
$165,000 in debt from credit cards, student
loans and a mortgage in 15 months using
the snowball method and a realistic budget
while also putting away $20,000 in savings.
His experience inspired him to start his
business.
Your budget should account for the
following, Kelly says:
• Basic necessities: Rent/mortgage, utili-
ties, groceries and gasoline.
• Obligations: Minimum payments on
credit cards and other debt.
• Nice-to-haves: Restaurants, coffee and
entertainment costs.
• Irregular recurring expenses: Insur-
ance, car repairs, tires, haircuts, vita-
mins, toiletries, vet bills, holiday gifts,
travel, weddings and gifts.
It’s the last category that often trips
people up and becomes the source of credit
card debt, Kelly says. “These little and
not-so-little expenses go onto the card and
are hard to pay off.”
Once you’ve put your expenses down
on paper or entered them into a spreadsheet,
go through each item and find ways to free
up enough money each month to pay off all
your debts in 12 to 18 months, he says.
Who this strategy is good for: Anyone
who is consumed by their debt.
5. GROW YOUR EMERGENCY FUND
In a June 2016 Bankrate survey, 28% of
Americans reported they had no emergency
savings. Another 21% said they had some
savings, but not enough to cover 3 months
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