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Title: Debt Free Living - Not Just A Myth!
Author: TJ Nelson
Article:
The term debt refers to something being owed, which is money in
most cases. Living a debt free life is jeopardized everytime you
charge up credit cards, get personal loans, finance a car, or
even buying a home using a mortgage. No matter what way debt is
accumulated, it is money that must be paid to the bank that
provided the loan.
It can be pretty easy to get into debt, especially since loans,
credit cards, and lines of credit make it possible to purchase
items one cannot afford to buy with cash, since they are given
the luxury of being able to pay it back over time. It can,
however, turn into a serious problem when interest fees and
other charges take place, because the individual is then
required to pay back way more than the initial purchase. More
and more fees are charged each month that there is a balance
remaining on the account, which can turn into a huge mess that
can leave individuals struggling for money.
The best way to live a debt free life is to avoid all credit
cards and loans, but this is not always possible for middle
class individuals. Credit accounts should be limited as much as
possible, and only used for necessities rather than material
items. Having a credit card for emergencies or a car loan is
ideal, but having more than two to three open credit accounts
can lead to serious debt that can be hard to get out of.
Once debt has accumulated, it can be hard to get out of it. Many
think that paying the minimum monthly payment is all that is
required, but it can actually take years to get a credit card or
loan paid off this way. If possible, it is best to pay at least
double the minimum payment each month, to ensure a small portion
of the loan is actually being paid off. Because interest fees
are charged each month, they usually cancel out the monthly
payment and actually cause the balance to increase.
For individuals with several open accounts, it is best to pay
off the accounts with the highest interest rates first. Making
the largest payment possible each month can save a great deal of
money in the long run, by avoiding high interest fees and
getting the loan paid off in a faster amount of time. Once the
accounts with high interest rates are paid off, one can then
focus on other accounts to get in control of their debt.
Another way to get control of debt is by using a personal debt
consolidation loan, which can be used to pay off all credit
accounts at once. This method is beneficial to individuals with
several open accounts, since the loan will only require one
monthly payment and one interest rate. It can save many a great
deal of money, as long as the interest rate is lower than the
various rates on the other cards and loans. It should only be
considered by those with decent credit scores, since it can
actually cost more in the long run if interest rates are much
higher than those on the accounts being paid off.
Debt consolidation services are available to those with
excessive debt, and they help individuals learn how to keep
themselves out of debt in the future. The debt consolidation
services actually work with the various banks and credit issuers
to set up a payment plan, and reduce or eliminate some of the
high interest fees that the banks charge. This option works best
for those with excessive amounts of debt that they cannot
control, since it can have a negative effect on credit when done
this way. Most debt services will not allow the cards to
accounts to be used while they are being paid off, and may even
require the accounts be canceled once the process is completed.
Rather than paying several monthly payments to various accounts
each month, the debt consolidation service will require one
monthly payment to be paid to them, and they take care of
distributing the money to various accounts.
The best way to live a debt free life is to avoid debt in the
first place, by only using credit cards and loans in case of an
emergency. Because this is not always possible, it is best to
get rid of existing debt by paying it off as soon as possible.
By making large payments each month, using a personal loan to
pay off the entire debt, or using a debt consolidation service
to get debt in control, it can be easy to live a debt free life
in only a short period of time.
About the author:
Discover proven methods to freedom, become <a
href="http://debtfreeiq.com/">debt free</a> in months without
enrolling in a debt repayment plan or filing bankruptcy. TJ
Nelson, provides the tools to eliminate debt once and for all at
http://debtfreeiq.com.
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