5 Ways To Eliminate Debt

Sep 9, 2021 | Financial Planning, Retirement

If you don’t get a handle on it, it can get out of control. We’re talking about debt. Karl Eggerss gives 5 ways to eliminate debt on CBS.

Sharon Ko:

If you’re deep in debt, you’re not alone. People nationwide are struggling big time. Real quick, this is the latest data. In the second quarter of 2021, US household debt climbed to a record high of $15 trillion. This after a rise in home purchases, auto loan, and credit card spending. There’s no one single plan to get debt free, but there are simple strategies to get ahead. Financial adviser, Karl Eggerss kicks it off with the first tip.

Karl Eggerss:

Pay off the really small balances. A lot of people think that you should pay off your highest interest rate credit cards first, but I think psychologically, it’s best to get some out of the way. So if you have five or six credit cards and there’s one that’s really small, go ahead and pay that one off first because you will mentally feel like you are accomplishing something by getting rid of one credit card.

Sharon Ko:

Up next, tackle the credit card with the highest interest rate.

Karl Eggerss:

If you can call the institution to try to get a lower rate, I would advise that. If they won’t do that, you might look at actually transferring that balance to an introductory rate to another credit.

Sharon Ko:

Another tip, try to pay more than the minimum balance.

Karl Eggerss:

Pay the minimum, you’re never going to pay it off. So make sure that you are cutting spending somewhere else to pay that credit card down.

Sharon Ko:

Fourth idea, make money fast by selling your stuff.

Karl Eggerss:

And literally take that money and put it towards the credit card.

Sharon Ko:

Fifth one here is obvious but important.

Karl Eggerss:

Create a budget because you need to know what money is coming in the door and what is going out. Because if it’s just a matter of spending too much, you’re never going to get anywhere with those credit cards and it’s going to continue to be a problem. And with the interest rates, it’s going to continue to mount up bigger and bigger.

Sharon Ko:

We went through these tips quickly. Check them out again on kens5.com/moneysmart.

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