"18 Tips To Get You Out of Debt"

When it comes to money management mistakes, debt counselors have seen it all. And if you knew what they already know, you could save a lot of money and more than a little grief.

Unfortunately, by the time consumers sign on for credit counseling, they already have an average of $30,000 in bills and seven or eight credit cards, says Susan Keating, president and CEO of the National Foundation for Credit Counseling.

1. Renegotiate your credit card interest rates.
Call your credit card companies and tell them that you want a lower rate on your credit card. They will most likely accept and give you a lower rate. If you don't ask, you'll never get anything. Keep in mind that you are a client and this is business. You should always negotiate.

2. Never pay the minimum on your credit card bills.
Approximately 35 million Americans pay only the required minimum, as low as 2 percent of their balance each month. Sticking to that rate, it could take years to clear your debt and you'll end up paying far more than the cost of the items or services you bought.

3. Leave your credit cards at home
Enforce the cooling off period on new credit purchases by taking the cards out of your wallet. Store them in a place that's not easily accessible (in a safe-deposit box, maybe, or frozen in a block of ice).

4. Consider a balance transfer
Look for offers with a 0% introductory rate for a full year, relatively low rates thereafter (13% or less) and no annual fees.

5. Figure out what you really owe
Gather your statements and make a simple table listing the amount you owe, and the minimum payment and interest rate for each card. This will help you determine the order in which you should pay off your cards.

6. Focus on the highest-rate card first
Pay as much as you can each month while making only minimum payments on your other cards.

7. One Month Free Services Are Deadly.
Those low introductory or one month free offers sound great, but they are designed to get you hooked on the service. Be sure the service fits in your current income and budget.

8. If you co-sign, that debt is yours.
If someone in your family wants you to co-sign for a car, or any loan, just say no. Often, the other person defaults, leaving the co-signer to pick up the payments.

9.Bouncing checks can cost you your bank account.
Not only your bank can kick you out if you write bad checks, but it can put you in a financial database that acts as a kind of black list.

10. You need to make a monthly budget.
Use a monthly budget sheet track your income and expenses. There is nothing better to help you track where your money goes and where you can cut when you over spend.

11. Auto loans.
Buying or leasing a car should be justified and meet your monthly budget. Spending $400 to $500 on a car may not always be the best decision. Keep in mind that if you buy a new car you will need the appropriate insurance coverage, which may run up to $150 to $200 per month easily. So your $400 to $500 per month will suddenly become a $600 to $700 per month and you will have to pay for probably 5 years. A car is usually an expense and not an investment. You could easily buy a used car that can cost you a lot less. I know many individuals who buy very reliable cars from their mechanics, that cost $2,500 and never have any problems with their cars. They have no monthly fee, and they just need minimum insurance coverage (around $50 per month). Most importantly because they do not have a $400 to $500 car loan per month they usually keep their debt-to-income ratio bellow the 50% required when you apply for a home loan.

12. If your name is on the bill, it doesn't matter what the divorce decree says.
It's important whose name is on the bill. So if your ex spouse is taking over the mortgage, car loan or credit card payments and can't make the bills, the creditors will coming after you. Any late payments could show up on your credit report. So when you divorce take the necessary steps to be removed from all joint accounts. That will save you a lot of troubles and unpleasant surprises.

13. Balance transfers aren't the solutions to your credit problems.
Debtors often transfer a balance from a card with a higher interest rate to one with a lower APR. This tactic can in fact damage your credit score. This technique won't make your debt disappear.

14. If you're late on one card, other card issuers could raise your rates.
Known as "universal default," this is one of the dirty little secrets of the credit industry. Creditors figure that late payments could signal money problems, which make you a bigger credit risk.

15. Challenge your credit card bill.
If you see a fee that doesn't look right such as a late penalty when you mailed the bill on time, just don't just accept it, and call the company. Your credit card issuer will most likely remove the fee.

16. Auto dealer financing.
Do not hesitate to get your own financing before you enter the car lot to buy your car. Your bank or credit union will most likely offer you a better rate than if you get the car dealership's financing. The dealer wants to make a sale and will find a way to make as much money as possible. The higher the financing, the more money he will make on the sale.

17. Pay the mortgage first.
If you have some financial problems make sure you pay your mortgage or rent first. Being late on your mortgage payment is probably one of the worst that can show on the credit report. And if you try to refinance your home to get cash out and pay off your debt, it will be harder to find a lender and you will get a higher interest rate. You do not want to lose your house and all the equity you may have built. Don't put your home at risk for your credit cards.

18. React.
If you're in debt, it is time to cut spending and set up a real monthly budget. Borrowing more money just makes it worse. You need to seriously ask yourself how you are going to get out of that situation. Based on your monthly budget sheet you will find out if you over spend. If it is the case you need to cut spending, find solutions and may be you will have to work a second job. You need to be proactive. If you do not know what to do seek the advice and help of a professing debt counselor to work out a workable budget.

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