Finish Rich Workbook Creating a Personalized Plan for a Richer Future

The Debt-Free Solution Get Out of Debt...And Stay Out of Debt A 13-Step Action Plan to Get Out of Credit Card Debt #1DETERMINE IF YOU HAVE A CREDIT-CARD PROBLEM. When it comes to debt, there aren't any simple rules or formulas. The guideline you should use is how you feel about your situation. So how do you feel? To begin with, get out all your credit cards and all your credit-card statements and put them on the dining room table. (If you are married or have a partner, try to get them to do the same with their cards and statements.) Now list each credit-card account and its current outstanding balance, starting with largest and working down to the smallest. In this way, you will...Figure out how much you owe. #2PAY YOUR DEBT DOWN SYSTEMATICALLY. If you want to keep a card or two for emergency purposes or to build a credit record, that's fine. But the rest of your plastic is going to be "DOLP"which stands for Dead On Last Payment. So let's get DOLPING! Take the current outstanding balance on each statement and divide it by the minimum payment that particular card company wants from you. The result is that account's DOLP number. Once you've figured out the DOLP number for each account, rank them in reverse order. By creating this list, you now know which credit card can be paid off the fastest by making minimum payments. Ideally, your payments should be a lot higher than the minimum. Whatever you can afford to pay above your required minimum payments for the month should be applied to the card with the lowest-ranking DOLP. #3GET YOUR CREDIT-CARD COMPANY TO LOWER YOUR INTEREST RATE. There's an amazingly simple way to make paying off your credit-card debt easier: Just call your credit-card company and ask for a lower interest rate. First, call the company and ask them to tell you your current effective annual rate. Once you know the real rate, ask to speak with a supervisor. Explain to the supervisor that you just received a new credit-card application from a competing company that is offering a much lower interest rateand that unless he can match or beat the competitor's rate, you intend to transfer your balance today. Another way to get a credit-card company to lower your interest rate is to offer to consolidate all of your credit-card debt with them. If nothing else, it means less paperwork for you, since now you have only one credit-card company to deal with (and write checks to), making it that much easier to focus on getting debt-free. #4RUN A CREDIT REPORT ON YOURSELF. Now that you've taken an overall look at your debt situation, you need to go deeper. The best way to do that is to have a credit report run on yourself. There are three main companies that keep track of consumer debt and assign credit ratingsEquifax, Experian, and Trans-Union. To get a copy of the report, you should contact the companies directly. In addition to providing credit reports, the Web sites of all three companies offer a variety of services for consumers, including glossaries of credit terms, articles about managing credit, tips for protecting your ID, and explanations to help you understand your credit score. #5SCRUTINIZE YOUR CREDIT REPORT FOR MISTAKES. A little known secret about credit reports is that they are often filled with errors. Here are some examples of the kinds of mistakes that show up on credit reports all the time: 1. Your name, address, or phone number is wrong or out of date. 2. Your social security number is wrong 3. Your birth date is wrong. 4. Your marital status is wrong or out of date. 5. Your payment record is wrong. 6. Credit accounts you consider closed are listed as still being open. 7. YouBach, David is the author of 'Finish Rich Workbook Creating a Personalized Plan for a Richer Future', published 2003 under ISBN 9780767904810 and ISBN 0767904818.