Negotiate Your Way Out Of Debt

Eliminating your debt is a daunting task. What can you do to get out of debt fast? Believe it or not, negotiation along with proper financial responsibility is your foothold out of the rat race. Learning how to eliminate your debt might be one of the most important life skills that you learn because it can bring you happiness and fulfillment. In order to successfully eliminate your debt, you must use a combination of self-control, proper negotiating skills, and some future planning.

Here Are Some Tips

1. Chop 'em up or freeze 'em. Start by taking all your credit cards out of your wallet/purse and cut them up into pieces. If you're one of those people who make the claim that you might need those credit cards in case of emergency, then a unique strategy is to freeze your cards--literally. Put the credit card into a paper cup and fill the cup with water and then freeze it. You won't have immediate access to the credit card and it will still work for you in case of emergencies. Whatever way you choose to get rid of your credit cards, make it a symbolic ritual of your commitment to get out of debt.

2. Start living within your means. You'll be amazed at how much money can slip through your fingers on small daily purchases. Start living within your means by paying cash for the things that you need to purchase. Start looking for the cheaper items. Remember, brand names do not always equate to being a better product. Big businesses count on the fact that you are going to toss them your money without question, so don't make it so easy for them. Use coupons wherever you go. Buy in bulk to reduce costs. Learn how to cook. The ways to save money are endless. Just remember that living within your means does not mean you have to live poor-it just means you have to live smarter.

3. Consolidate all your high-rate credit cards. First check out the maximum credit limit and APR on all your credit cards and choose the one with the lowest APR and consolidate your other credit card balances onto that one account. Make sure that there are no hidden fees associated with the balance transfer. Another way is to negotiate a loan that offers a lower APR than what you are currently paying for and pay off your high interest cards with that loan. Just be very careful about the small print because many credit card and loan companies will offer a low introductory APR, but once that is over, they jack it up through the ceiling.

4. Invest in your debt. Many people who are stuck in debt still pay quite a bit into their mutual funds or stock portfolio thinking that they will get a higher rate of return. In most cases, this will never happen. Annual APR's for credit cards are a whopping 24% or more. I have yet to see a constantly performing stock or mutual fund that turns out even 15% on a regular basis. Treat your debt like a high-interest investment-one where you are guaranteed to earn a huge rate of return. Always invest in your debt before you put money into investments.

5. Use a trusted family member. One of the best ways to get out of debt is with the help of a financially stable family member because they will usually give you the cheapest deal on a loan. Get an IOU agreement in writing and pay them a predetermined amount every month. Some people choose not to go this route because of pride, but it could be the fastest and cheapest way out of debt. Just make sure you possess the integrity and honor to repay your debt to them otherwise you will have more problems than just financial ones.

6. Don't get suckered into taking more debt. A dirty negotiation tactic that loan companies like to use is to offer you more of a loan than you need to pay off your debt, thus adding more debt onto your existing debt. This tactic works the same way as when a child brings a stray puppy home and asks, "Can we keep him?" The credit companies know that there is a great deal of emotional attachment to that extra credit and they are betting that you are going to take that "stray puppy" home with you. Resist the temptation to take that extra credit home with you because it will cause more problems than it is worth.

7. Kill the smaller vermin first. If you have several debt accounts in various denominations, then attack the smallest debt first with full force and kill it as quick and as painlessly as possible. Once that debt is gone, then use the newly freed savings from the last debt and apply it towards killing the next largest one, and so forth. This is a simpler and much more effective way of eliminating debt than paying small amounts off of each loan. It also has the psychological benefit of boosting your motivation with each progressive success.

8. Stay busy. It's a known fact that if you have too much free time on your hands, you are more likely to spend money than if you were busy. Take up some recreational activity to keep you occupied so that you don't have that free time to go spend your money.

9. Set up an auto-pay system. There is a ridiculous amount of money to be made on late charges and finance charges. Credit card accounts spiral out of control because people see that they do not have any monthly minimums dues and let it roll over to the next month. The credit card companies love this because you have just given them extra money in the form of finance charges to your account. Always pay more than your minimum to get out of debt. Avoid handing free money over to companies who charge you for late fees by setting up an EFT or automatic bill pay system so that you won't have to deal with writing the checks, finding stamps, and mailing the bills every month. Having an automated system do this for you will make sure those bills get paid on time.

About The Author

Tristan Loo is an experienced negotiator and an expert in conflict resolution. He uses his law enforcement experience to train others in the prinicples of defusing conflict and reaching agreements. Visit his website at http://www.streetnegotiation.com or e-mail him directly at tristan@streetnegotiation.com

In The News:

---

Is Debt Consolidation The Magic Bullet?
Corsavoo.com, France - 9 hours ago
There are several ways out of this dilemma and one such way is through debt consolidation offered by government sources as well as debt consolidation ...

McCain, Obama Need to Talk About the `D' Word
Bloomberg - 3 hours ago
On a personal level, you can get out of debt through consolidation, pay-downs and savings. Before any of that can happen it's essential to demand leadership ...

How To Get Non-Profit Credit Card Debt Consolidation Help
3x24 - Your Newspaper and News Magazine, Germany - Sep 2, 2008
Non-profit credit card debt consolidation services analyze your situation honestly, letting you know exactly what their debt elimination plan will cost you ...
Little Know Credit Card Debt Advice For College Students 3x24 - Your Newspaper and News Magazine
all 2 news articles

Credit Card Debt Consolidation Services: How They Operate
3x24 - Your Newspaper and News Magazine, Germany - Sep 2, 2008
The problem with using credit card debt consolidation services is that no one ever tells you how credit card debt consolidation services really work and ...

Debt Consolidation - How and When to Use it to Settle Debt
3x24 - Your Newspaper and News Magazine, Germany - Sep 2, 2008
Do not take on more debt until the debt you have is paid. Address what you can fix on your own and then look for help. Debt consolidation may be the answer ...

Who Will Benefit From A Non Profit Debt Consolidation Service?
Corsavoo.com, France - Aug 29, 2008
When you contact a non profit debt consolidation service, you will be seeking the advice of a Certified Credit Counselor. The counselor will help you design ...
Credit Card and Personal Debt Consolidation Loans -- the Real Answer? Corsavoo.com
Basic advice on destroying debt Corsavoo.com
all 3 news articles

The Realities About Bad Credit Debt Consolidation
Corsavoo.com, France - Aug 29, 2008
Debt Consolidation Companies: What Exactly Do They Do? Basically, what a bad credit consolidation company does is that it acts as your mediator. ...
Watch Out For The Pitfalls of Debt Consolidation Loans Corsavoo.com
all 2 news articles

Non Profit Debt Consolidation
3x24 - Your Newspaper and News Magazine, Germany - Aug 25, 2008
A common solution to debt issues is debt consolidation, and many of the organizations that have formed to help people consolidate their debts are non-profit ...
Car Financing For Anyone Dealing With Low Credit Scores 3x24 - Your Newspaper and News Magazine
Credit Card Debt: Having an Efficient Escape Plan 3x24 - Your Newspaper and News Magazine
Understanding How the New Bankruptcy Laws Work 3x24 - Your Newspaper and News Magazine
all 4 news articles

Best Syndication
Surrounded by debts, don't worry debt consolidation loans are here ...
Best Syndication, CA - Aug 26, 2008
For people like these, debt consolidation loans is the right medicine to recover from the above mentioned problem. Debt consolidation loans are the loans, ...
Debt and the Changing Face of the Credit Market Best Syndication
all 6 news articles

Why Should I Use A Non Profit Debt Consolidation Program?
Corsavoo.com, France - Aug 27, 2008
The idea of a non profit debt consolidation program should be to help the consumer become educated about how credit works and provide counseling to help ...

debt consolidation - Google News