In order to stay out of trouble and maintain a good credit rating, one must learn how to manage their debt. Unfortunately, just about everybody has some level of debt: car loans, house loans and student loans are very common. The following is some advice to help you manage your debt.
Don’t accrue more debt. It may seem like common advice but the best way to manage your existing debt is to not accrue more debt. Consider using cash instead of credit cards and set up a budget that you can stick with.
Pay down the highest interest rate debts first. Interest rates are, unfortunately, the price of having debt. Paying down the highest interest rate debt or loan first means that you’re wasting less money on interest rates.
Consolidate. If you have several credit cards with outstanding balances, consider consolidating them onto one card or secure a bank loan to pay off the cards. Either way you’ll be paying less in penalties, interest and fines. Online personal loans are another way to get money to consolidate your debt.
Ask for advice. There are many free credit counseling services out there that can help you manage your finances and reduce your debt. Before you get in over your head, consider talking to one of these agencies. Never pay for this service; there are many free, reputable companies out there to help.
Managing you debt before it becomes problematic is much easier than trying to deal with debt after you’ve missed payments or defaulted on loans.