The 7 Secrets to Getting?and Staying?Out of Debt

As vice president of the American Credit Foundation, a nonprofit organization that helps individuals and families manage their debt, Mike Peterson knows firsthand how financial problems can wreak havoc in one's life. Each day, counselors at the Midvale, Utah-based foundation help desperate clients dig themselves out from under piles of unpaid bills, stern notices from collection agencies and ominous foreclosure threats.

So, exactly what does it take to get-and stay-out of debt?

Here are 7 secrets that will help set you on the right path.

1. Cut Back on Credit Cards

Banks love to send offers for new credit cards to consumers, and mailboxes overflow with low-interest-even no-interest-"unbeatable deals."

This doesn't mean you should apply for them and risk running up large bills.

"Ideally, one should have no more than two or three credit cards," Peterson says. "I would recommend a Visa or MasterCard, followed by an American Express card. Having two or three different cards will allow you more flexibility when utilizing credit, as some companies do not accept one or the other."

2. Understand the Consequences of Breaking Rule #1

Even if you have excellent credit and zero debt, applying for too many credit cards can damage your credit rating.

"Generally, inquiries for new credit can affect your credit report for up to two years," Peterson says. "Having too many credit cards-whether carrying balances or just high amounts of available credit-can negatively impact your credit score. Banks will look at your credit based on what you currently owe and also what ability you have to immediately incur additional debt."

3. Stop the Spending

To minimize or avoid debt, monitor your monthly expenses-and halt spending when your budget starts to get tight.

"An additional reason to limit the number of credit cards you have is to prevent the possibility of not being able to keep track of all of the expenses you have incurred, which may make it difficult or impossible to pay them off each month," Peterson says.

If you reach that point, he has one simple rule: "No more charging."

"Commit now to discontinue the use of credit cards," he says. "In fact, cut up the cards you have, call the companies, and close the accounts. If you must have a credit card for work, try a debit card. These are widely accepted, and the funds are pulled directly from your checking account."

Don't apply for another credit card until you can pay off all balances due and be 100% debt-free.

4. Pay More Than You Owe

Once you fully understand the monthly minimums you owe on each debt, add 5% or 10% to your total payment, if possible.

"The addition is not mandatory," Peterson says, "but it will dramatically improve the success of your debt-reduction program."

5. Stay the Course

Continue to pay 5% to 10% more on each debt until all debts are completely paid off. Even if your minimum payment requirements decrease as your debt diminishes, keep making the same payment, Peterson urges.

"And if one credit card is finally paid off, make the same total payment each month," he says. "Just apply the extra funds to one of the other debts."

6. Do the Math

Before you dig in your heels and say, "I just can't do this," it's worthwhile to see how Peterson's advice plays out in real dollars.

"If you owe $2,000 on a credit card with a 21% interest rate, and you make only the minimum payment each month, you will owe on this account for approximately 19 years-and pay a total of $6,725.64 in principal and interest," he says. "The steps I've already discussed will help you pay off the debt in a fraction of the time. The emotional commitment to make this plan work may not be all that easy, but using this program-even without the additional 5% or 10%-will allow you to pay off the debt in about 8.5 years, and you will save approximately $2,387 in interest."

7. Turn the Tables-and Start Earning Money

If you pay off your $2,000 debt in 8.5 years (versus 19 years of minimum payments), you will have 10.5 years to place that monthly minimum payment in an interest-bearing bank account, retirement account or other investment.

"Interest is a magical tool," Peterson says. "Creditors use it to their advantage all the time. It can also work in your favor if properly implemented into the right program. If the steps mentioned above are taken, it won't be long before interest is working for you, instead of against you."

-----

Australian Debt Reduction offers all Australian consumers free debt consultations to assist them in getting back on top of their debt. They explain debt consolidation in simple terms and if you have over $4,000 in debt there are methods available to the Australian public you may not have heard of to help limit the amount of interest paid and rapidly reduce your debt. Visit Australian Debt Reduction at http://www.australian-debt-reduction.com.au or contact them directly on 1300 306 272

---

Google News Updated : Thu, 16 Oct 2008 20:45:26 GMT McCain Outlines Financial Plans - RTT News eFluxMedia McCain Outlines Financial Plans RTT News - 32 minutes ago (RTTNews) - Republican presidential candidate John McCain gave a speech in Pennsylvania Thursday, where he listed his various ideas for fixing the financial crisis and criticized Democratic presidential candidate Barack Obama's ideas. Health and education reform Los Angeles Times No Presidential Pardon for Healthcare Stocks Barron's Etownian - Carolina Peacemaker - Wall Street Journal Blogs - Galen Institute all 58 news articles Publ.Date : Thu, 16 Oct 2008 20:12:55 GMT Hurricane Omar Veers Toward Ocean - New York Times Boston Globe Hurricane Omar Veers Toward Ocean New York Times - 3 hours ago By ANAHAD O’CONNOR Hurricane Omar, a powerful storm capable of inflicting yet more damage near the tail-end of a hurricane season that has already produced sweeping devastation, sliced through the southern Caribbean on Thursday, stirring up panic and ... Video: Omar Grows Into Fierce Category 3 Hurricane AssociatedPress Hurricane Omar Sweeps Over Virgin Islands, Out to Sea (Update4) Bloomberg Reuters - Voice of America - CNN - eFluxMedia all 4,009 news articles Publ.Date : Thu, 16 Oct 2008 17:13:51 GMT Helicopter crash probe focuses on Air Angels - Chicago Tribune Washington Post Helicopter crash probe focuses on Air Angels Chicago Tribune - 32 minutes ago By Gerry F. Smith and Liam Ford | Chicago Tribune reporters The crash of the Bell 222 helicopter run by Bolingbrook-based Air Angels Inc. is the second crash for the company in five years, and prompted Children's Memorial Hospital—the flight's ... Video: Helicopter Crash Kills Four Outside of Chicago AssociatedPress Child, 3 crew killed in US medical copter crash eTaiwan News WJZ - Kane County Chronicle - Aero-News Network - WTHR all 762 news articles Publ.Date : Thu, 16 Oct 2008 20:13:10 GMT Edwards says Johnson will be inactive Sunday as result of assault ... - ESPN CBC.ca Edwards says Johnson will be inactive Sunday as result of assault ... ESPN - 1 hour ago By John Clayton Kansas City Chiefs coach Herman Edwards said after Thursday's practice that halfback Larry Johnson will be inactive but not suspended for Sunday's game against the Titans. Report: Chiefs RB Johnson to miss Sunday's game Sports Network LJ won't play vs. Titans Topeka Capital Journal The Associated Press - Titans Radio - FanHouse - Pro Football Weekly all 207 news articles Publ.Date : Thu, 16 Oct 2008 19:22:09 GMT Term Limits: Who’s For, Who’s Against - New York Times United Press International Term Limits: Who’s For, Who’s Against New York Times - 34 minutes ago By JONATHAN P. HICKS, FORD FESSENDEN and KEVIN QUEALY As the City Council opens public hearings this week on whether to extend the term limit from two to three to allow Mayor Michael R. Bloomberg to run for re-election, the body is divided. Shhhh! They're With The Mayor New York Daily News Public, Pols Weigh In On Term Limit Bill NY1 amNewYork - Crain's New York Business - New York Times Blogs - United Press International all 422 news articles Publ.Date : Thu, 16 Oct 2008 20:10:53 GMT Billy Bob: Don't Blame Me for Duchovny-Leoni Split - E! Online E! Online Billy Bob: Don't Blame Me for Duchovny-Leoni Split E! Online - 1 hour ago Unlike, say, Alex Rodriguez, Billy Bob Thornton is wasting no time in publicly distancing himself from any culpability in a major celeb split. David Duchovny, Téa Leoni Remain Friendly People Magazine David Duchovny, Téa Leoni call it quits Los Angeles Times Hollywood Today Newsmagazine - Radar Online - Washington Post - eFluxMedia all 293 news articles Publ.Date : Thu, 16 Oct 2008 19:33:36 GMT Directed by: Oliver Stone - Rolling Stone MTV.com Directed by: Oliver Stone Rolling Stone - 52 minutes ago Toss professionally incendiary Director Oliver Stone in the biopic ring with the worst president in US history, and you rightly expect something more than a walk on the mild side. Just a Minute With: Oliver Stone on George "W." Bush Reuters 'W:' The man who wasn't there? New York Daily News AZ Central.com - Santa Rosa Press Democrat - Providence Journal - Chicago Tribune all 669 news articles Publ.Date : Thu, 16 Oct 2008 19:52:51 GMT RSStoBlog RSS Parser

PARLOT::Ebooks, Scripts, Websites, and more...

Adsense websites

Save Money When Going Out

It seems as though whenever we go out for the... Read More

How to Negotiate Debt Settlement

People over extend themselves financially as a result of a... Read More

Debt Relief -- Why Most Programs Have A 75% Failure Rate

Debt consolidation, equity loans, credit counseling, debt management plans, even... Read More

Your Ticket Out of Debt Relief

If you are in debt over your head and wondering... Read More

Is There A Way Out Of Your Debt Problems?

Do you have multiple debts? Do you have just one... Read More

Debt Free and Carefree

Are you still clearing a mountain of debt amassed last... Read More

Credit Repair? Its All Up to You

Log onto to a search engine such as google.com and... Read More

Should You Join a CCCS - Consumer Credit Counseling Service for Debt Relief and Financial Freedom?

Do You Need to Join a CCCS - Consumer Credit... Read More

Craving For Financial Freedom

Have you ever felt trapped in a Rat Race and... Read More

Debt: Dont Pay Your Minimum Balance

Almost all Americans carry credit card debt. Actually, over 40%... Read More

Use A Debt Checklist To Examine Where You Are

A Debt Checklist allows you to look at items and... Read More

Getting Past The Idea Of Budgeting & Saving Money

I'm sure you'll agree that budgeting, saving money, and eliminating... Read More

Get Debt Free

If you once have been caught in the debt trap,... Read More

Bouncing Back from a CCJ

Should you be unfortunate enough to face a CCJ ?... Read More

The Road to Debt Relief

Living with debt is not something someone hopes for, but... Read More

Slowing Spending - The Key To Your Debt Plans Success

Anyone who embarks on a debt reduction program should know... Read More

New Bankruptcy Law Will Not Protect You from Identity Theft

Recently passed by Congress with overwhelming support, the oddly-named Bankruptcy... Read More

Debt Consolidation Versus Debt Negotiation

Debt consolidation versus debt negotiation are two options that are... Read More

Credit Repair - Understanding The Basics

What is Credit?Credit means that you are using someone else's... Read More

IVA Advice

An IVA (individual voluntary arrangement) is an alternative to bankruptcy... Read More

Bad Credit Home Loan To Get You Out Of Debt

A "bad credit home loan" can help you climb your... Read More

Drowning in Debt? Tips and Tricks for Getting Out of Hot Water with Creditors

Do you, like millions of other Americans, feel like you're... Read More

Should You Invest In Savings Or Payoff Your Debts?

I have faced this financial question 8 years ago and... Read More

Debt is The Master of Souls

Wholeness requires separation. In order for you to experience yourself... Read More

Debt Elimination

If you're reading this article right now I'm sure that... Read More