The two types of debt and the strategy to pay them

Too much personal debt can become cancer in our finances. With so much debt, we always pay a growing interest and grow continuously until there is not enough money left to pay the rent. When that happens, we may just borrow more to prevent our financial downfall. You need to stop living in debt and start living on income money. If you decide to indebt, make sure the debt you use for investment, not for personal consumption. That’s why perhaps you need to also visit and solve your debt problem as soon as possible.

Debt is due to need and desire

The first, and foremost reason you owe is you spend more than you earn, so you need to change that, by earning more or spending less or both.

If you only have a credit card balance that is not small but has the income to pay off in one or two years and has a reputation for smooth credit. You can transfer the card balance to 0 percent installment and use it wisely, it may be an easy choice.

However, if your credit card limit has reached the maximum or has tried to suspend the payment, it may now be too late. All you can do is seek help from a debt consolidation company that could help with your financial problems.

Strategy to pay off debt

Start a strategy to pay off the debt. If your money is limited, find the highest interest-bearing debt to pay off. In the early stages, we will focus to pay off the debt with the highest interest. This is done so you are not too burdened with high interest, which of course burdens your next step.

What about the other debt? Pay other debts with minimum payment. Example: We focus on paying off credit card debts with the highest interest rate, other credit cards are paid the minimum plus a little.

Furthermore, you should be able to distinguish between 2 debt options. Good debt is debt whose purpose is to add assets. Conversely, bad debt is debt that is consumptive, rah-rah, obedient desire. Well, now whether buying a car including good debt or bad debt? An example we take installment of the sports car. Though we do not need a sports car, a family car. Then this is what is commonly referred to as bad debt.