Blogging To Get Out Of Debt? Make Sure You Do It Right
writing content, making money February 21st, 2007Some blogs such as the one run by Tricia, who was actually featured in the NY Times, keep a running total of her debt for everyone to see and the progress she has made.
Pay Off Debt The Right Way
One thing I did not find on any of these blogs is advice on how to properly pay off debt. I got the idea to write this post after hearing stories from friends about their piling debt and how they planned on tackling the debt. Rather than paying off the expensive (high interest) debt first, a common mistake is to pay off the largest debt first. At first it may seem like the right thing to do because of the sheer size of some debts. For example:
When faced with this debt, many people feel obligated to pay off the car loan. The huge five-figure debt owed to your bank may seem like the highest priority to pay off, but in this example the best money saving strategy is to pay off that evil credit card debt. In our debt driven society, it has become the norm for many people to carry a credit card debt. Paying off the expensive debt will help make your dollar go further when reducing your debt.
What If You Have Multiple Credit Card Debts?
If you have multiple credit cards with the same interest rate, how do you decide which to pay off? If you are in debt trouble you are probably concerned about your credit rating. To help rebuild your credit, or protect your credit rating from being negatively affected it is extremely important that you pay off the credit cards that are closest to being maxed out. The reason you would want to do this is to reduce your “utilization ratio”. This number tells lenders how much of your credit you are using. If your credit cards are always maxed out, lenders will see you as a higher risk customer and may refuse to approve future loan requests you may have.
Stop Collecting Points
If you are already carrying a balance on your credit card, your #1 priority is to pay off your balance. Avoid the trap set out for you by the credit card companies and instead, use cash to make your essential purchases. Any left over money should go directly to paying off your credit card balance. You may be tempted to collect a few more points on your credit card, but you’re essentially paying for these useless points in the form of interest payments.
If It Works, All The Power To You
So, for all you bloggers out there blogging to make extra money to pay off your debt, all the power to you! Keep it up and good luck with your debt reduction, just try to do it right so you can get out of debt faster. Good luck!
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