How to manage debt effectively

Many people have debt they need to pay. Whether they have a good or bad credit history, thousands of dollars are still owed. It makes a lot of sense if people avoid using credit cards without intending to pay their bills. If you have thousands of dollars that are due while maintaining enough income, you can still pay off your debt. As long you make your monthly payments accurately and on time, then you are on your way toward becoming debt free.

Get rid of credit cards

Credit cards are something that are hard to give up because people just spend and spend using them, not realizing the outstanding balance they owe. If your debt has to do with credit cards, the wise thing to do is to cut or burn it, or opt to have a hold put on your account. That way you don’t have to risk overspending when you go shopping.

Avoid making unnecessary purchases

This is another problem with debt. Buying “stuff” like take-out food, fancy electronics, or expensive clothing/jewelry using loans or credit cards can risk ruining someone’s credit history when there are no intentions to pay back. If distinguishing the difference between “wants” and “needs” is a problem to you, get a counselor who can give tips that help you save money to pay your debt.

Make payments in full

One quick way of escaping debt is by paying your monthly amounts due in full. To speed up the process, try paying more than the minimum each month. If you need assistance doing so, you can contact a credit counseling agency; the U.S. Department of Justice provides a list of approved establishments by state. Counseling coaches from these organizations help borrowers find solutions for successfully paying off the money they owe to their creditors or lenders.

Write checks appropriately

Many creditors accept check payments. If you write a check to pay your debt, it is best that you do it in black ink. Be sure that you date it properly and never postdate. If you date your check on a major holiday or a Sunday, that is considered legal. Do not include Mr., Mrs., Ms., or Miss on the check.

Avoid mailing cash

Do not send cash with your payments. However, with permission from your creditor or lender, you can have the option of using money orders. For example, if you wish to pay a portion of your credit card balance with a money order, you may be asked to write your credit card number directly on the money order. On the “pay to the order” blank, write the name of the company you’re returning your cash to. Write your return address directly below it. All money orders are valid until signed, so be sure that you provide your signature.

Be careful while paying via telephone

As for paying by using your bank account via telephone, be sure that you clearly give the operator your account and transit numbers. Often, creditors can intrude your privacy by calling your residence and even your employer just to get your minimum balance paid in full. Some debtors worry about picking up the telephone before giving the creditors their checking account numbers, only to discover that the creditors will soon make unauthorized withdrawals. Firmly tell the operator not to do such a thing. It is against the law, and lawsuits are common for creditors who mysteriously withdraw money from bank accounts.

Pay on time

Making good debt payments on time adds positive points toward your credit history. If you mail a payment, be sure that you do so at least one week in advance. Do your best to not let your balance accumulate with late fees by procrastinating. Failure to pay your credit card balance on a timely basis can increase your annual percentage rate (APR) in your account.

To become debt free, appropriately make your payments in full and on time. Doing so can at times become a struggle, depending on your financial situation. But as long you make resolutions toward having a good job and paying attention to your payment deadlines, you will keep your credit score in good shape.