4 Tips to Pay Off Your Debt ASAP

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I don’t think I know of anyone who likes being in debt. Do you? If you, or someone you know are trying to get out of debt, here are some ideas that will help.


The first thing you should do is figure out all the debts you have. Which debts have the highest interest rates? If it’s from a credit card, call your creditors and work on getting the rate reduced. If they won’t do it, tell them you’ll take your business somewhere else. The key here is to be polite, but be persistent and don’t give up. It may take several calls, but it’ll usually work.

Call the company with the highest rate first, get the interest rate lowered, and work your way down to the cards with lower rates. But get every single one of your credit cards down to the lowest interest rate possible.

Stop Using the Card

Pay Off Your Debt

Adding to your debt while you’re trying to get rid of your existing debt is like intentionally trying to sabotage your own financial well-being. With that said, you need to stop making purchases with the card. If that’s a struggle for you, here are some tips on how to keep yourself away from the cards.

  • Put them in a safe and lock it away.
  • Put them in a cup of water, and freeze them. Seriously.

And last but not least, if you’re bold enough,

  • Cut them up into pieces.

However, though you need to stop using the credit card, don’t close the account. This will have a negative effect on your credit score.

Make More Than the Minimum Payments

If you just make the minimum payments, you could very well be stuck in debt for the rest of your life. Does that sound like a situation you’d like to be in?

So pay the minimum amounts on all your debts, plus put an additional 10% of your take-home pay on the debt with the lowest balance. Why the lowest balance? Because once that debt is finally paid off in full, you’ll feel like you’ve made progress and accomplished something good.

After the first debt is paid off, do not start spending the money you used to pay off that debt. Remember that you’re still in debt. Instead, take the minimum payment plus 10% of your pay, and use it to pay down your debt with the next lowest balance.

Get Help with Your Bills

If you can’t pay all your bills, learn better ways to budget your money and cut your expenses. Take care of the bare necessities first, and cut ruthlessly where you can.

Among the necessities I can think of are food, housing, and work-related expenses such as transportation and clothing. After these and other necessities in your life are taken care of, find ways to cut back on or eliminate luxuries. Here are some suggestions.

  • Cut cable TV for awhile.
  • Get rid of your gym membership and exercise outdoors, or in your own home.
  • Cook at home more, and eat out less.
  • Shop for a cheaper phone plan.

Remember, this is only a temporary inconvenience while you get out of debt and back into a good financial situation.

Do you have any other tips on how to pay off your debt?

Photo by alancleaver_2000


  1. says

    These days it might not be as easy as at some other times, but the concept of getting a second job (part time) or finding another way to earn money so that ALL of the after-tax dollars could go to debt (avoiding the temptation to reward ourselves with more toys or fluff). Once the debt is gone, perhaps the job should be too so that time could gbe given to things that are more important than money.

  2. says

    Good point about getting the second job Art. That can definitely speed up the debt-repayment process.

    And I agree about making a decision to stop the extra work once the debt is gone. Time is one thing we don’t get more of, so it should be used wisely.

  3. says

    I also agree that increasing income is sometimes the fastest way to destroy debt! What I have found with people is that they usually need someone to come in and evaluate their budget. The questions that come up usually cause them to rethink their “needs”.

  4. says

    Good point about budgeting Khaleef. Knowing where where your money is going and where changes can be made can definitely improve our finances.

  5. Alan Reed says

    Great point on having someone review the budget. For some reason in North America, personal financial discussions have become taboo. I am leading a ministry at our church where we help people with basic financial plans (budgeting/debt management). Most people spend a lot of money based on emotion, having someone review this can be sobering. People in financial distress need “tough love” and a continuous conscience in order to make real, lasting changes.

    • says

      I agree about the personal finance taboo. Folks here in PNG are very open about bringing all their ‘numbers’ to ask for financial guidance. I never had that happen in the States of Canada.
      If we could have that level of accountability I think people would be blessed.

  6. says

    Alan, as a resident of the US, I can attest to the fact that money discussions are uncomfortable many times. When they do happen, they also tend to lead to disagreements and arguments.

    I can’t exactly pinpoint the reason why, but I think decisions with money are just a personal issue that reflects who we are. Perhaps we aren’t comfortable revealing all of that?

    Craig, do you think people’s finances are better off in PNG because of that openness?

    • says

      No, I’m not sure their finances are better. However, they recognize the value of good advice. That seems to be a sign of the wise person in Proverbs. In North America people would rather ‘look’ like they are in control of their finances than ask for help.

  7. Alan Reed says

    OK this is going to sound cynical and perhaps a bit over the top. I believe there is a large contingent of businesses that don’t want people comparing their financial state. This comparison might cause a realization that most people can’t afford their current lifestyle and this ‘keeping up with the Jones’ notion is crazy. Consumers would become much more empowered with this information. Of course many businesses would not like this as consumer spending and debt drive a lot of the top line growth Wall Street cherishes.

    Perhaps there needs to be a movement, or a revolt, in North America to share your financial information with your friends and family!

    • says

      I think you are on to something. If people could get their acts together and work for a common good I think that would be for everyone’s benefit.

  8. says

    Thanks for the comment Alan. If you and your family aren’t on the same page, then that is likely to lead to financial troubles. So I agree about sharing your financial information with your own family at the minimum.

  9. says

    The best way to pay down debt is to not incur it in the first place. People need to learn how to stay out of debt. There is a big difference between wanting something and needing it!!

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