Debt Management: How to get out of debt

The first thing you need to do if you want to start accumulating wealth is minimizing your debt. Why pay 18% monthly interest on a credit card when you could be gaining 10% by investing all that money in stocks and bonds? It just doesn't make any sense to have credit card debt, but still the average American household has over $8000 of it according to MSN Money.

You need to first assess your own financial health. How many credit cards do you carry? What are the interest rates on those cards?

Learning from your Credit Report

It's a good idea to look at your credit report at least once a year. This free report can be found at AnnualCreditReport.com. You can also purchase more details, including your credit score by going to MyFico.com. For $50 you can purchase your credit reports from Equifax, Experian or TransUnion. Why is it good to know your credit score? Having a good credit score will get you a better interest rate on your credit cards, home mortgage, car loan, etc. If you know what it is you are in a better position to improve your current rates.

LINKS

Smart Money: Debt. This website tells you all about how to get out of debt.

Articles

Fight away the debt blues (February 2010)