What to Do if You are in Debt

If you are in a credit crunch, you need to quickly adopt certain wise habits which will lessen your burden rather than adding more difficulty to it. Not only can these habits make it easier to pay off your debt, but also will help in smart choices resulting in better decision making and lead to some amount of savings.  

Control Your Credit Card Habits

Have your hands on your annual credit reports; check them for accuracy which would assist in identifying all debts.

Piling up credit card charges without being able to clear previous ones will only worsen your debt and add to your stress. You really don’t want to add to the amount you owe already, right? So, try repaying the charges and only use it for necessities while avoiding bigger purchases that you can avoid till you pay off the debt. Ignoring credit card bills is also a big no.

Opening up new credit cards unless you’re taking advantage of a zero percent balance transfer promotion is something you want to avoid at this point but can be saved after you’ve paid your debt.

Make it a point to pay all your credit bills on time, so that you build a good credit history.

Don’t Pay Only the Minimum Charges

Making a lump sum payment to one card while you pay only minimum charges to the others is not feasible. Instead, pay more than the minimum charges to shrink your debt.

Realistic Budget

It is not as hard as it sounds. Spend the minimum amount of money to cover your basic expenses like food and electric bills while focusing your attention on putting the major chunk of your money towards your loans.

Alteration of Lifestyle

Realistic budget and lifestyle alterations go hand in hand. Avoid eating out regularly;  cut back on alcohol. Stop buying expensively (branded) things like clothes, shoes and luxury items. Shop during discounted hours for grocery and everyday items. Raid the thrift stores. This will make a great difference to your budget altogether.

Do Not Spend Emergency Funds

Life is full of surprises; some good some not. While you are trying to repay your loans and consider putting all your savings into it, take a step back and realize that an emergency can arise at any point of time. This may include healthcare and financial losses which cannot be neglected. Keep an emergency savings fund you touch only in emergencies.

Negotiable Interest

In some cases, interest rates are often negotiable. All you need to do is to gather your financial statements and have a conversation with the representative of your credit card company or institution. Since this would act as a huge favor from their side, all you need to do is to be patient and respond with sheer courtesy. Monthly payments must be made on the appointed time in full amount. Try your best to negotiate for a lower credit card rate. You may consider approaching a different company altogether to shift your business elsewhere if they still don’t lower the rate of interest even after persistence. Make sure you get a better deal out of it.


No plan works without a step by step analyzed strategy towards reaching the goal. If you are confused and think of it as something not doable, do not hesitate to contact a credit counseling agency or a bankruptcy attorney for advice. You might want to take a look at resources on National Debt Relief to know if there is an easier way out.

Decide which credit needs to be paid first – the one with a lower interest rate or the higher one (snowball or avalanche method, as it may be called).  Autopay options must only be set up if you can pay those minimum debts. Choose the target debt and pay slowly towards it before proceeding to another target. Strategy here won’t work unless you closely monitor it.

Indulge in Part-Time Work

It is one of the easiest options available to anyone who is willing to put in the extra effort. If you enjoy a certain work or activity which might be your hobby, take it up as a business model and generate a part-time income out of the same. It may not be enough to cover your debt but can easily assist in taking care of your basic expenditures. Even if it covers your food bill, it is a great deal!

It sounds hard, but with efforts and smart work it will be satisfying to drive off your debt.

Written by CelebMix