Not all debt is the same. Certain types of debt are more expensive than others. The interest rate [1] on credit cards and personal loans is often much higher than on mortgages and student loans. When you think about paying off your debt, focus on the high-interest debt first.
The first thing you should do is to make a list of all of your debts, putting them in order from the highest interest to the lowest. If you've taken out a payday loan [2] or another type of unsecured debt that doesn't require a credit check, this will be at the top of the list. Payday loans can have an APR as high as 1000%. Pay these off immediately. Other than payday loans, credit cards will probably be at the top of the list.
If you can, pay off the credit cards with the high interest rate straight away. If you can't, see if you can get a new credit card with a 0% introductory rate, then transfer the balance from the expensive cards onto the new card. This will buy you some interest-free time. In most cases, you'll have to pay a transfer fee of around 3%, but this is usually much less than what you've been paying in interest.
If you can't get a low-interest credit card, consider taking out a low-interest loan and consolidating your debt. It may take you a bit longer to clear the balance, but your monthly payments will be smaller, and you can save money in the long run.
If your credit score is too low to get a new credit card or a low-interest loan, and you've fallen behind on your payments, you may want to consider debt settlement. With debt settlement, you negotiate with your creditors, either directly or through a specialist company, to reduce the amount you owe. The downside to going the settlement route is that it ruins your credit score. You'll also have to pay income tax on any forgiven debt.
For help with debt call toll-free 1-800-213-4430.