Do-It-Yourself Debt Management

You can apply many debt management strategies on your own without the help of a debt counseling agency. Here are a few suggestions on how to better manage your debts.

-- Select Service -- Credit Card Consolidation Consolidate Multiple Debt Types Tax Relief Credit Repair

1. Target the right kind of debt. Any debt counseling service will tell you that some kinds of debt are more insidious than others. Unsecured debt is usually the costliest and most damaging kind of debt. Credit cards, medical bills, and student loans are all examples of unsecured debt. In managing your debt, you should focus on unsecured debts first, as these tend to have the highest interest rates. On the other hand, secured debt, such as a mortgage loan, can take a backseat to other debts because it is usually considered a "good" debt by debt counselors.
2. Don't be afraid to talk to your creditors. One strategy that most debt counseling agencies employ that you can try on your own is attempting to negotiate your rates with your creditors. Especially if you are a long-time customer who pays on time, your creditor may be willing to lower the interest rates on your accounts. If your creditor is inflexible on your rates, try threatening a balance transfer for more negotiating power. Your creditor won't want to lose your business to a balance transfer, so they might be more accommodating in that case.
3. Rework your budget. A good debt counselor will always sit down with a client and revise his/her budget to maximize the amount of money devoted to debt repayment. However, most consumers can do this themselves without the assistance of a debt counseling service. Take a look at your budget or create one if you don't already have one. Revise your expenses so that debt repayment takes priority, even over savings. Remember that the changes and cutbacks you make in your budget are only temporary; you can rework your expenses again once your debts are paid off.
4. Cut up your credit cards. You don't need a debt counseling service to understand that you will never get out of debt if you continue to rack up charges on your credit cards. If you have trouble controlling yourself with credit card spending, then cut up your cards immediately. You may want to save just one card for emergency purposes, but store it in a place that is difficult to access. If you don't want to cut up your cards, then at least resolve to keep them at home so the temptation to splurge won't be as strong.