By Renee Sylvestre-Williams
You're paying down your debt and feeling pretty pleased with yourself. That's excellent, because you're on your way to
But are you doing enough? Even if you put aside money every month, pay off more than the minimum and adhere to your budget, these three small things could slow down your debt-repayment schedule -- if you don't deal with them.
1. You're not reading the fine printWe get it -- reading all the fine print on any financial document is an overwhelming proposition. But as irritating as it is, you really should read all documentation, especially anything that involves your credit card, mortgages and other loans. That's the place where you'll find out what happens if you miss a payment or if there'll be any increase in interest rates.
The same goes for your monthly statements. Interest rates can increase. By reading the small print, you might find out that your credit card that had a favourable 12 per cent interest rate has suddenly jumped to 14 per cent. That extra two per cent means a higher proportion of your payment is going to interest than before -- and your debt won't
disappear as quickly.
2. You're not negotiatingAsk and you more than likely will receive. Companies want to keep your business and they want their money -- so call them up and try to negotiate
lower interest rates on your debt, especially on your credit card.
There's no reason to feel awkward about calling your credit card company. Remember, they're used to this and often expect people to call to renegotiate interest rates. Just prepare your script beforehand, remain polite and be realistic with your expectations. You're probably not going to go from 19 per cent to 10 per cent, but a drop of a few percentage points can make a huge difference.
3. You're not changing institutionsSometimes you can't negotiate with your credit card company. If you aren't able to get a reduction in your interest rates, then it might be time to switch cards, or talk to your bank about a loan or line of credit to pay off your credit card balance.
Starting up a new credit card account is not something you should do on a regular basis. In fact, we suggest you do it only if you have to -- and, once you've switched to a lower-interest-rate card, pay off your credit card debt. All of it. Then put the card away and try not to use it.
These three tips seem minor, but what they do is help you increase your awareness about your money, where it goes and how much of it is actually paying off your debt versus how much of it is just covering the interest. Now, go find the paperwork on your credit card and give it a good read.