Debt consolidation article: Working to Get Out of Debt

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Getting out of debt is a priority for millions of American consumers. It seems like it would be easy -- to get out of debt, you have to pay it off. But there is often more than that to it.

The main secret to getting out of debt is that just starting the process is often the hardest step. So many people say that they want out of debt, but they never take that first step. I understand. Starting to work on your debt situation can bring up a lot of emotions. There is blame, shame and worry to deal with. For most people, it is easier to just ignore the extent of their debt situation.

However, sooner or later debt catches up with everyone. You can either deal with it now and get it over with or face the consequences of waiting. With every day you wait, you are losing money in interest and finance charges. If you wait until you absolutely must get out of debt, you may face ruining your credit by making late payments. You could even risk losing your home. Some people wait so long that the situation builds to a bankruptcy.

The first step may seem scary, and it is emotional, but it is essential. You have to face your financial situation. Gather a pen, notebook and all of your bills. Start by listing the non-debt related bills first. These include your utilities, housing expenses and monthly service fees. Remember to include those that are automatically withdrawn from your checking account.

Next list all of your debts in order of highest interest rate to lowest interest rate. Include the account name, interest rate, balance owed, monthly payment and contact information. This is your master debt list. You will use it to organize the repayment of your debt.

The idea is to start at the top of the list with the highest interest rate and work your way down. This is called the snowball method. With each debt you pay off, you add the monthly payment to the next one on the list. The payment amount increases as you go down the list, and you pay off your debts faster.

You should use the list to call your creditors and ask for a lower interest rate. You will be surprised at how successful you can be if you have a great credit and account history. You can also consider transferring you balance to a card with a lower rate for the life of the transfer. Just watch out for transfer fees and other costs. You should close any accounts that you transfer the balances from. You don't want to use them again.

When your interest rate is lower, it is easier to pay off your debt. More of your monthly payment is going towards the amount you owe, instead of interest.

About the author of Working to Get Out of Debt

RateEmpire.com, http://www.RateEmpire.com, an internet consumer banking marketplace is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com an online shopping portal #1 Shopping Online http://www.1ShoppingOnline.com