How to pay off debt
If you have debt and want to be debt free, the first thing to do is to cut off your credit cards so you don’t use them anymore. You are probably wondering how you are going to survive, well, if you destroy your credit cards then you will not be tempted to use them and you will have to manage with your cash. This will force you to a cash based economy. In other words, only use cash (for everything) from now on.
Get a piece of paper and write down all your balances from smallest to biggest. You really want to start paying off the smallest balances first, once you are done with the smallest balance move on to the bigger balances. This will accomplish several things: first, psychologically you will feel like you are going somewhere, you are accomplishing something. Secondly, it will show your lenders if they look at your credit history that your liability is shrinking.
Depending on your type of debt, you might have to postpone paying some types of debt. Student loans for instance you should start paying the minimum until you settle all your credit card debt. Once you are caught up your credit card debt, then start paying your student loans at the max you can afford. Health-care debt also can be in some cases negotiable and you can always do a payment plan (small installments)
Always pay off your debt, it’s the right thing to do. You got in this mess to begin with, so try to organize yourself, create a budget and if needed get a second job.
This is very controversial, some people that believe credit scores are rubbish/garbage and you should not care about them at all. This is due to the fact that they will operate using cash only. If you feel this way, as soon as you pay off your lenders, close the accounts. If you do care about your credit score, do not close the account but rather keep it open for ever and NEVER ever use that credit card again.
Also remember that if you carry a balance on a credit card, you will pay interest. Interest is bad. Think about it, why are you giving away your hard earned money just for carrying a balance when in the first place if you were to operate using cash only, you would not have. This could save you a huge chunk of change.
Food for thought: “Never buy on impulses and only buy what you really need“