5 Things Everybody in Debt Needs to Know

As of 2019, the average household debt in the United States was almost $10,000, totaling over one trillion dollars of debt in the entire country.

If you are one of the millions of people that feel like you are drowning in debt every month, here are 5 things you need to know.

5 Do’s and Don’ts When You’re in Debt

1. Don’t borrow from Peter to pay Paul. Many people get so far in debt that the only way to pay one bill is to take out another credit card or loan. They get the mentality that if they are already this far in debt, why not go a little further? The truth is that without a detailed plan to get out of debt, adding more to it is not going to help.

2. Don’t add unnecessary items to your debt. Using your credit cards to buy food or pay your electricity bill might be an urgent, understandable emergency. But using them to buy the shoes that you just had to have or pay the Netflix bill for the month are not good uses for a bill that is going to accrue interest.

3. Do be careful when accepting a zero-interest credit card. Zero interest credit cards sound like a dream come true at the time. If you use them right, you can transfer high-interest balances to the new card. But you’ll need to pay those balances off before the interest term ends and your rates skyrocket. In some cases, your new rates may be even higher than the one you were trying to get out of before.

If you do accept a zero-interest card and transfer that big ugly balance over to the new card, be sure you use those monthly payment-free bonuses wisely. You won’t have the old payment and you won’t have a big payment on your new card for a while, so that’s the time to invest that extra money into buckling down to pay off your debt.

4. Do work with a professional to reduce your debt. Going it alone is not the strategy that works for most people. You can become easily frustrated when it looks like your debt is not going anywhere. Professionals have tried and true strategies and debt consolidation tips that work.

5. Don’t fall for “checks in the mail” scams. Once you start actively researching ways to get out of debt, you’ll probably find multiple lending companies sending you “checks” in your mailbox. Some of them are real checks and it can be tempting to cash them and end your worries. Check the fine print, though. The strings attached to “free” money are usually not worth the cost.

You Can Get Out of Debt

You don’t have to reinvent the wheel to find your way out debt. Millions of others before you have done it through strategies that work. Find the one that works for you and you will be enjoying your hard-earned money yourself before you know it.