Having too much revolving debt is not a pleasant situation and for many households, this causes tensions that threaten even the family harmony. This predicament should be faced with crucial efforts to quickly repay your debts and to find a comfortable financial situation.


Erase Debt To help you in your journey, here are 5 strategies that will accelerate your repayment process. Take time to consider your situation and understand each of these strategies in order to maximize your efforts.


1.     Identify and prioritize your debts 


It is first important to know that there are several types of revolving debt. To some extent, we could divide the debt into two main types: healthy debt and toxic debt. A good debt is debt that is associated with an asset that will keep or gain value. So your mortgage or debt investment lever is healthy for your financial situation. These debts are generally low rate and over a long period of time.

In contrast, there are toxic debts represent debts associated with consumer spending. Your credit card purchases with deferred payment or line of credit debt that is referred to as toxic. These debts have an interest rate generally higher and stronger penalty on non-repayment.

You understand that it is very important to repay in priority your toxic debts, even spread over the longer term of your mortgage payment. Current consumption spending must be paid through your current income!


2.     Obtain a preferential rate on your credit card


Pending payment of your total bank credit cards, there is a simple way to reduce your interest rate. Banking institutions issuing credit cards offer for most base rate ranging from 18% to 21%. However, they also offer parallel cards at a reduced rate fee of $ 20 or $ 30 annually. You could see your rates fall in the range of 8% to 12%.

This offer is very interesting for those households that have difficulty to fully pay the amounts due at the end of the month. You could generate significant reductions in interest charges simply by subscribing to this offer.


3.     Adapt your payment


Most people tend to pay revolving debt monthly while revenues are mostly collected weekly or every two weeks. This difference makes the management task more difficult and may give the impression that households can spend more. It is therefore recommended to pay as your debt by transferring after each entry of money the amounts that may be allocated to the payment of the debt. Tight control of your cash flow provides a better view of your finances and avoids leaving money sleep.


4.     Refinance your revolving debts to reduce your interest rate


When the situation permits, you have the option to refinance your revolving debt to get a lower rate loan. For example, re-mortgage your house to pay your toxic debts and enjoy a moment of respite. You can also use debt consolidation to reduce your interest rate and stretch your payment period. To help you in your efforts, there are many tools to calculate mortgage payments as well as financial advisors who will be able to evaluate the gain from refinancing.

Note however that the refinancing debt is subject to certain conditions and must be done at the same time as changing your eating habits. So this is a way to give you greater financial flexibility and not to repay your debts. Financial institutions also require a recovery plan for your personal finances to approve a refinancing of debt.


5.     Change your consumption habits


This strategy is probably the most difficult to implement, but the most profitable in the long term. Change its consumption habits begins with an assessment of its financial position and its ability to generate revenue. Therefore consume based on your income. A decrease in the standard of living is very difficult to accept, but necessary to limit debt.

We must also understand the payment options. Even if the offer “buy and pay later” seems interesting, know that paying cash is the best way to deal with your everyday purchases.

Finally, to assist you in your purchasing decision, always remember these two questions:

Do I really need to buy this product or service?

Do I have the financial means to get it?