There’s no sugar coating it: Debt sucks.
But if you’ve got a pile of bills to pay, it’s probably not your fault.
We don’t come out of the womb knowing how debt works. There’s no “pay off your loans” class in high school. And the credit card companies aren’t out to help you. In fact, they’re in business to keep you in debt until you die.
And yet, beating the credit card companies at their own game can be ridiculously simple. Let me prove it to you. I’ll show you a 4-step system to crush your debt fast.
It’s the same system I wrote about in my New York Times best-selling book, I Will Teach You To Be Rich, which thousands have used to pay of their debt faster than they thought possible:
Here’s everything you need to get out of debt once and for all.
How to get out of debt fast — no matter how much you owe
- Step 1: Find out how much debt you have
- Step 2: Attack your debt
- Step 3: Save thousands in debt repayments by lowering your interest rate
- Step 4: Find hidden cash to pay down your debt fast
Step 1: Find out how much debt you have
Do you know how much debt you have?
If not, that’s exactly what credit card companies want. They love it when you blindly send in the minimum payment, thinking you’re getting out of debt. The reality is that minimum payments dig your hole even deeper.
So STOP. Go through your account statements, call the companies, do whatever it takes to find out how much you owe on these bills. You can use this tool to track it (it’s the second link on this list). The chart looks like this:
It’ll help you find out how much you owe to each company and what your interest rates are.
Stop right now and do this.
Step 2: Attack your debt
Say, “Bye-bye” to every credit card in your wallet.
If you’re going to pay down debt, you can’t add more debt. Remove the temptation to use them altogether. My favorite tip: plunge your cards into a bowl of water and shove them into your freezer. Lock them in a safe. Do whatever it takes to force you not to use them.
That’s your first point of attack.
Next, look at the chart you used to track how much debt you have. Rank your bills in order of annual interest rates. This includes your student loans.
Whichever bill has the highest interest rate, that’s your first victim.
You’ll save the most money (in interest payments) by putting as much money as you can toward that one.
For all the other bills on your list, you’ll just pay the bare minimums until you’ve shrunk the highest interest-rate bill down to zero. You’ll repeat this process — of paying off the highest interest rate, then the next, and so on — until all of your debts are paid in full. You don’t have to pay anything yet (more on why in a minute).
Step 3: Save thousands in debt repayments by lowering your interest rate
What if I said you could save $1,000 (or more) in interest with a 5-minute phone call?
Would you beg me for the number to dial?
That’s why I LOVE negotiating interest rates. Saving a few percentage points on your credit card bills is the same as putting thousands of dollars back into your pocket.
My favorite part: you can just pick up the phone and follow this word-for-word script:
YOU: “Hi, I’m going to be paying off my credit card debt more aggressively beginning next week, and I’d like to lower my credit card’s interest rate.”
CC REP: “Uh, why?”
YOU: “I’ve decided to be more aggressive about paying off my debt, and that’s why I’d like to lower the interest rate I’m paying. Other cards are offering me rates at half what you’re offering. Can you lower my rate by 50 percent or only 40 percent?”
CC REP: “Hmmm…After reviewing your account, I’m afraid we can’t offer you a lower interest rate.”
YOU: “As I mentioned before, other credit cards are offering me zero percent introductory rates for 12 months, as well as APRs that are half what you’re offering. I’ve been a customer for XX years and I’d prefer not to switch my balance over to a lower-interest card. Can you match the other credit card rates, or can you at least go any lower?”
CC REP: “I see…Hmm, let me pull something up here. Fortunately, the system is suddenly letting me offer you a reduced APR. That is effective immediately.”
That simple 5-minute conversation can save you a lot of money.
Make the call, and if you’re successful, do two things:
- Celebrate your accomplishment (this is a big deal).
- Make sure to adjust your chart from step one. You get to chop that big ugly interest rate down and lower your monthly payments.
Step 4: Find hidden cash to pay down your debt fast
If you’ve followed along this far, you’re probably thinking, “This is great and all, but where do I get the money to pay down all these bills?”
I recommend you take a two-pronged approach:
First, tap into hidden income:
Instead of strict budgets or extreme frugality, I prefer to cut costs mercilessly on everyday bills. These are things like your cell phone, car insurance, and other monthly expenses.
Saving money on these everyday items is an easy way to free up cash to put toward your debt. The cool thing is, we can show you how to save $1,000 in a week — without cutting back on the things you love — like these people did:
Try the challenge and see how much money you could put toward your next debt payment.
Second, earn more money:
I’ve always believed that there’s a limit to how much you can save but no limit to how much you can earn.
What does that have to do with paying off debt? Well, imagine having extra $1,000/month (or more) that you could put toward your bills.
The best part is, it’s far easier to earn $1,000 than to slash $1,000 from your budget.
Just a few examples of ways to earn more money:
- Get a $5,000 raise with a simple, 15-minute conversation with your boss (this option is free).
- Earn $1,000, $2,000, even $5,000 or more on the side, every month, while still keeping your day job.
- Or — this is my favorite option — you could give yourself ultimate freedom and unlimited earning power with an online business.
Whatever you choose, the rewards can be huge and make a significant dent in your debt today.
Getting out of debt quickly is one of the best financial decisions you’ll ever make.
And earning more money is the secret weapon for paying down your debt as fast as possible.
Wipe out your debt — at the snap of a finger
Download a free copy of my Ultimate Guide to Making Money. It’s packed with my best strategies for creating multiple income streams, starting a business, and increasing your income by thousands of dollars a year.
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