Get Out Of Debt - KCBD NewsChannel 11 Lubbock

9/3/02

Get Out Of Debt

Just how long does it take to get out of debt? Most consumers say a long time. Many have been in debt since college.

Best-selling Author and Financial Expert Suzie Orman says the reality of debt is, "You have to face it to erase it." If you can't pay off your credit cards every month and you're still spending what you don't have, then listen up. Orman suggests, "Open up your credit card statement. List every single company that you owe money to, from the highest interest rate down to the lowest. Not from the amount you owe them, the highest interest rate to lowest interest rate."

Next, get on the phone but not necessarily with a consumer credit company. Orman says, "With most companies, you will pay them to consolidate debt. The interest rate won't be that much lower."

So, why not do it yourself? If you are paying more than 6.9% on any card, then it's time to negotiate. Call the number on the back of your credit card and say "let's talk." Orman says, "This is what you should say to them. Say, I'm calling to close my account. The person on the end of the phone will say, 'why?' and you will simply say, because I've gotten a better interest rate somewhere else."

Insist on a 6.9% interest rate or below. If they can't do that, transfer the balance to someone who can. Then close the old account and cut up the plastic. Otherwise, you'll be in double debt before you know it. So, go back to your list and pay the most you possibly can on the highest interest rate payment and the minimum plus $10 on each one under that.

Orman says, "When the first one is paid off, take that amount of money that you were paying towards that card, and pay it towards the second. When the second is paid off you'll take what you would pay towards the first and second and pay it towards the third, and before you know it you will be out of credit card debt."

Keep in mind every dime can save you time. So don't wait for that monthly statement. Get a stack of envelopes and address them ahead of time. When you have an extra twenty or even ten dollars drop a check in the mail and watch your debt disappear.

For NewsChannel 11's Consumer Connection, I'm Sharon Maines.

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