Take the following test:
"See just how much you even know about debt in the first place."
If you buy a $2,300 couch using your credit card and you pay only the minimum on the card at 18.99% interest, how long will it take you to pay it off?
3 years 6 years
7 years 10 years
What will the couch cost you by the time it’s paid off?$2,800 $3,200
Short test. Let’s see how you did.
If you buy a $2,300 couch using your credit card and you pay only the minimum on the card at 18.99% interest, it will take you 9.9 years to pay it off and you’ll pay $1,998 in interest, taking the cost of the couch to just under $4,300 once it’s paid in full.
Debt-Free Forever: Take Control of Your Money and Your Life
Make a plan.
Without a plan, you’re simply throwing money at the problem debt without having a clear sense of what you’re trying to accomplish. Start by making a list of all the people to whom you owe money -- your creditors. Put the list in order from highest interest rate to lowest. Make sure you’re putting your greatest effort at repayment against the debt with the highest rate.