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You did it! You’ve dedicated yourself to pulling out of debt and now you’re looking at a brighter future. This is no time to start taking on new debt but instead to exercise discipline. As Abraham Lincoln once said, “Discipline is choosing between what you want now, and what you want most.” 

Abe makes a lot of sense but here are some more tangible guiding principles to help you start out on a new path to being debt free:

1. Make More Than Minimum Payments:  Accounts with high interest rates can take decades to pay off if you make only the minimum payment. Ideally, you would pay your bills in full each month.  In reality however, most of us carry some debt. Rather than make only the minimum payment each month, throw in some extra to help pay down that debt. Also, make an extra payment every so often. Even small contributions will help retire that debt sooner and save you money in interest payments.

2. Find one exemplary credit card to use rather than multiple: The better your credit the more options you’ll have, but in any case, look for a credit card with the lowest possible interest rate and one that offers you something in return. That could be travel miles, hotel stays, cash-back, or some other kind of perk. One of the many factors that comprise the calculation of your credit score is “how long you’ve held an account”, so consider using the card you’ve had the longest and inquire whether they can lower your interest rate or offer some benefit that isn’t already provided.

3. Ask for a reduced interest rate: Creditors love reliability and will often reciprocate that loyalty. If you have consistently made on-time payments in the past, chances are they’ll work with you on finding a lower interest rate in order to keep you as a customer. Call customer service and in your friendliest tone of voice, tell them “I’ve been a customer for X years and want to continue to appreciate the benefits of their card, but can you assist me with a lower interest rate?” If they say there’s nothing they can do, politely ask to speak with a supervisor and ask again. Oftentimes, persistence pays off.

4. Transfer your high-interest rate balances to a lower interest rate card: Many card issuers will offer a low- or even zero-percent interest rates for transfer balances. This means more of your payment will be applied toward the principal balance and you will retire your debt sooner. These lower rates are typically only temporary, so you need to have a plan to pay off the balance entirely during that introductory period or retire enough principal that you can continue paying more than just the minimum payment.

5. Review your household budget: Spend a couple of weeks writing down every purchase you make in a diary (and we mean EVERY purchase). Compare that with the amount of income you’ve had during the same period. The birds-eye view this provides will help highlight areas where you can easily cut spending (opt for the free water fountain or a glass of water rather than a relatively pricey soda — it’s better for you, too!). You’ll also be able to determine what money you truly need to live on and how much you can afford to pay down your debt beyond the minimum payment.

6. Think of reducing your debt as you would losing weight — it takes commitment and time to pare the excess: Similar to discovering healthier eating and exercise habits when on a diet, you’re learning positive financial steps right now to reduce your debt. While you may slip up once in a while, hope is not lost as long as you continue to monitor yourself, make adjustments, and take control. You’ll soon reach your goal.

7. Before you go to any store, make a list and check it twice: This is true well beyond the holidays, too. Whether it’s groceries, clothes, or the holidays, write down exactly what you need to purchase. This will help keep you focused in an environment where retailers push as much product in front of you as they can. They do this because they know most people mindlessly shop and are prone to making impulse buys, which can derail your spending plan. When you walk through the sliding doors, list in hand, you’ll be too smart to fall for their tricks.

8. Throw a snowball at your debt! No, not a real snowball. Imagine a snowball rolling down a hill. It starts small but as it gains speed it adds more snow and grows larger from the momentum. What started as a tiny ball at the top of the mountain is now an enormous snowy sphere at the bottom. Now, replace that image of a snowball with your debt. List all of your debt, smallest to largest. While maintaining your minimum payments on every account, throw as much as you can at the smallest balance. Once that’s paid off, roll all that on to the next-largest balance. As each debt is retired, you’ll have even more money to put toward your next balance.

9. Avoid temptation-leave your credit card at home: You may find yourself in a situation where you say to yourself, “I just have to have that!” If you really do, you can return another time and make a smart purchase. But if you’re at all tempted to whip out the plastic for whatever shiny thing you come across, you’ll appreciate the distance between you and more debt.

10. Consult a credit consolidation company, such as Vantage Acceptance: We have effective debt reduction options and have saved our customers thousands of dollars in principal and interest payments. Get started today by calling one of our advisors at (800) 725-0214.

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