Ways to reduce the debts

During those days when I was heavily in debts, most of my debts are from credit cards. I was having 3 credit cards with high credit limits. I was a very good paymaster but that was the problem, the credit card companies will entice you with higher credit limits. Sometimes, the credit card camponies did not even tell you that they have increased your credit limit.

I visited many finance blogs on how to manage my money and how to be debt-free. I have learnt a few things and now finally I am debt-free. And the feeling is overwhelming.

If you have accumulated many debts from different channels, the first thing that you should do is to take a look at the whole picture: how much debts you have in total (not including you house mortgage or car loan). This is the most essential piece of information as you will formulate on how to get out of debts based on this amount.

Once you have this figure, the next thing you want to know is how much is the interest you pay per month on each of this debt. You then calculate the average interest that you are paying on this.

At the same time, scout around on any personal loan that is offered in the market. Most personal loan - ranging from 7% - 12% a year which is much lower than 18% a year for credit card.

Take a personal loan and settle all your debts. This way not only make you more focus but make sure that your debts are all paid. Personal loan make you commit a fixed amout a month and making sure all your debts are paid within a few years. Whereas the credit card give you the flexibility to pay the minimum amount which you know you will never pay them off in any fix duration.


Hope this helps