3 Steps to Eliminating Debt

Written by Cindy Morus

By Cindy Morus, Creator of the Pay Debt Quickly System

Are you struggling with debt? I’ve been there (and it was a major cause of my divorce). This is information I wish I had known then.

Step 1: Draw a Debt Picture Gather all your statements and enter your information in the Debt Payoff Info worksheet. You’ll need to know your balance, interest rate and current payment. Total the balances and the payments. Acknowledge that you used your credit cards to fund your lifestyle and move on to debt-freedom.

Step 2: Stop using your Credit Cards The credit card companies are masters at this game and if you’re carrying a balance, you’re on the losing end of the deal.

* Did you know that new purchases don’t have a grace period if you have a balance?

* Did you know that new purchases don’t usually get the existing teaser rate?

* Did you know that if you have multiple interest rates on the same card that most or even all of your payments will go to the balance with the lowest interest rate while the balances at the highest interest rate just keep compounding?

These are all great reasons to stop using your credit cards now!

Step 3: Convert Minimum Payments to Fixed Payments This is the beautiful part! Let me explain. When you get a home and auto loan, you pay the same amount of money for a specific amount of time and then you’re done and the debt is paid off. With a credit card, though, your payment is a percentage (usually around 4%) of your balance. As you make payments, your balance drops and so does your minimum payment. This is what will keep you in debt jail for a very long time.

However, you don’t have to make just the minimum payment. I recommend that you take the minimum payment from this month and pay that same amount every single month until it is paid off. Converting your credit cards payments to fixed payments can save years and years and thousands of dollars. Let’s see how much this method can save by looking at one client’s debt information:

Name Interest Rate Current Balance Minimum Payment

Visa 32.24% $970.86 $29.00

MasterCard 19.49% $1,506.00 $128.00

Cap One 16.24% $11,700.00 $277.00

Store Card 13.07% $1,407.00 $42.00

Auto Loan 8.09% $10,356.00 $237.00

TOTALS n/a $25,940.00 $713.00

Paying the minimums only will take 350 months and cost $49,007 (total interest is $23,067 almost double the current balances!). Changing the payments to fixed (paying the same amount every month as listed above) will take 47 months and the total will be $33,272 ($7,332 in interest). Total savings is $15,735 and over 25 years!! AND they didn’t pay any more than they paid this month.

Get More Help:

Eliminate your debt and save your money using the Pay Debt Quickly System. It comes with the software and strategies you need get rid of your debt without making an large payments or making any significant lifestyle changes. Click here to learn more and get started right away.

Tags: budtet, eliminate debt, get out of debt, Pay Debt Quickly System, PDQ