There are plenty of debt management solutions

There are several debt management solutions, some easy and some hard to follow. An easy solution is to replace your credit card with a debit card. Once you do so, you cannot accumulate fresh debt because you can spend only that much that you have in your account.

The more difficult is to curb your shopping impulses. They are the root cause of all debts. But a debtor has no other option. The purchases must be brought down to the bare essentials.

You can also look outside for a solution. Owning a house is a definite advantage because you can take a home equity loan, line of credit, or refinance your existing mortgage. This sum can then be used to pay off your debts. Generally, these loans come at interest rates which are considerably less than the rates charged by credit card companies. The flip side is that you may end up losing your house if you don’t repay the loan.

In most cases it is the credit cards that are responsible for debt. Users find it easy to swipe the card than pay hard cash. However, the repercussions can be severe. You not only incur a loan, but incur it at a very high interest rate – something that you would not do otherwise. You must therefore replace high interest cards by cards that charge the lowest market rates. This means that you must transfer your balance to the credit card provider offering the lowest interest rate.

You can also obtain a debt consolidation loan, as this enables you to make a single payment per month instead of making several payments to different creditors. Since the interest on a consolidation loan is less than the cumulative interest on all your other loans this reduces your debt considerably in the long run.

Another way of getting rid of debt is by selling off goods that may have outlived their utility. These could include antiques, jewelry, even an extra car! You could even consider renting out an unused property or even liquidate some other assets. Another way of generating extra income is to take up a second job. This is not always easy, but then it helps you get rid of your debt faster.

However, all these solutions will come to a naught if you do not curb your spending habits. That is why financial discipline is considered the best solution for managing debts.

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