When it comes to handling debt, there is a method to the madness. Everybody will have their own personal preference as to what makes them comfortable. In all honesty, dealing with debt is never comfortable, but the plan of action needed to dispose of outstanding safe online payday loans and credit card debt must be something you can stick with.
In order to pay off debt there needs to be a plan. Attacking debt will have a bottom-up or a top-down approach. There are pros and cons to each method. Success for either will definitely rest upon a person’s outlook on life. Do you want to attack your debt from the largest interest rate and work your way down to smaller ones? Do you need instant gratification that comes along with knocking out the smaller debt and then proceed to work your way up to the larger ones? Either method will work if you stay the course, so choose a plan that will fit you the best.
No matter which plan you do choose, attacking any online direct payday loans should always be your first action. The loan amounts are small enough to provide instant gratification and the interest is high enough to simultaneously knock one off the high cost end of the debt spectrum. It makes perfect financial sense. The rest is up to you.
Once online payday loan debt is gone, you can focus on credit card debt.
The bottom-up approach: Working on smaller debt first will provide the instant gratification many folks need to fuel their drive to complete the job. Paying debt off can take years so emotional rewards help to keep the momentum going. It is definitely a good approach if you don’t have any high interest debt. You will quickly free up money to apply towards larger balances. If you do have other high interest debt, this method will not be of much help with limiting current finance charges.
The top-down approach: This payoff method will have you attacking the largest interest rate first. The rest of the bills will receive minimum payments as you put every extra available penny towards knocking off the biggest finance charge. This strategy will not bring instant relief, but the hard work definitely pays off in the end. This method works great especially if you have one big balance clouding your budget’s success. If this debt does not carry the highest interest rate, you may end up paying more in interest over the long-term as minimum payments do very little to pay down a balance. Once it does get paid off, you will have freed up a large amount of income to attack the next debt down the ladder.
Pick the method that fits your personal goals the best. You will want to keep a watchful eye on the progress as you go. Watch all your efforts make a positive effect on your credit. Your future financial needs will have options at lower rates as a direct result of all your hard work. It is important to make a plan of action that you can stick to.