There is an actual type of debt that you can take out that will help you retire all your other debt. This is called a balance transfer debt. The problem is that this is very tricky. A lot of Americans fall for all sorts of tricks and shenanigans, and they end up creating more problems than they’re solving.
However, with the right framework and the right mindset, as well as a nice blend of focus and discipline, you can use this type of debt to destroy all your other debt.
Balance transfer debt can either be low interest or zero interest. There are many credit card programs out there that offer zero interest periods. The problem with these types of credit cards is that, a lot of the times, the credit limit is very low. So if your total credit card debt load is $100,000 and the credit limit that you get with most cards is $5,000 or $10,000, your back might be against the wall.
Still, you should not hesitate to use credit card advances that have zero interest periods to help you retire your debt. Use this as a tool. You might not be able to subsume all your debt under this scheme, but try to handle as much of your debt this way.
You might also want to convert your debt in stages. Maybe you can convert some debt into balance forward debt. Wait for certain situations to arise and convert the rest. What is important is that you are being proactive about finally getting your financial situation in order. You need to take the bull by the horns and work with it.
Stop running away from it. It is going to keep chasing you until it runs you down. Now is the best time to stare your financial problems in the eye and take decisive action. Mind you, this action might involve small baby steps. Regardless, as long as you are taking steps forward, you are making progress.
Once you have covered a substantial portion of your debt under a zero interest credit balance system, you need to focus on your expenses. Try to reduce your expenses to as little as possible and use the freed up savings to blast away at the balance transfer that you’ve put under the zero interest umbrella.
Keep this up until you’ve either knocked it out or you’ve kept it at a low level. Your next target should be your regular debt that has interest. Knock these out as well.
If you execute this properly, you’re attacking your debt problem from two fronts. You’re reducing expenses and you’re knocking out debt. It’s crucial that you keep expenses as low as possible. Try to turn it into a habit.
According to popular thinking, if you wish to start a new habit or lose a bad habit, you need to do the same thing over and over again for 21 days. Similarly, if you want to lose a bad habit, you just need to NOT do something for 21 days. Try this out today and see if you can develop healthier financial habits.