Debt elimination tips have become a necessity for many people who have made serious financial mistakes without knowing better. If you are tempted by all those TV commercials where a young professional live a rich and partying lifestyle living on credit cards, that is because banks and credit card companies wanted consumers to live in debt and earn them money on interest payments. More of us are ending up in debt because banks are giving out free credit cards and retailers are offering us cheap monthly repayment plans using these cards. Millions are now plagued with personal financial problems, no matter how high their incomes are. Without knowing how to eliminate debts, they live from paycheck to paycheck while their outstanding sums remain in their credit card accounts.

The United States Department of Health and Human Services conducted a survey and found that over 90% of Americans cannot become financially independent as many are forced to work in order to maintain living expenses with many others relying on relatives, government social welfare etc. Credit cards are one of the worst evils of today's society. Unlike mortgages and hire purchase schemes where you need to fill in applicant forms and loan approval takes days, credit cards are so convenient to use for impulse purchases and hence so easy for consumers to be trapped into debt. For example, you see a $2,000 set of home appliances and you like them very much, but pay day is still 2 weeks away. The sales assistant then told you to buy with your credit card so that you qualify for the minimum monthly payment of $50. Wow that’s so cheap and it is hardly 5% of your month salary, so you quickly signed for your purchase. And then, you repeat the above with several other items such as a new notebook, new designer bags and so on, thinking you are still within your income level. However, at 20% annual credit card interest, it will take you years to clear your credit card debts if you only make the minimum monthly payments requested. Debt elimination requires you to pay more than that. That means for the next ten years or so, you will not be able to keep any savings of your own. You just become a slave to the banks and credit card companies; even after the stuff you bought have broken down and thrown away after a few months.

The American Bankers Association show that many credit card users cannot even make the minimum monthly payments and let the interest and surcharges accumulate; note that many of these have high income of between $50,000 and $100,000. The typical American earn over $1,000,000 in the entire career lifetime, but up to 80% of this money ended up paying for interest fees and taxes. Learn to apply these debt elimination tips starting from today!

Always pay cash whenever possible. Cancel all your credit cards and apply for debit cards instead, so that you cannot spend more than what you have in your bank account and create more new debts. Live frugally and buy only at sales, use discounts coupons. Do not even think of buying on monthly installments again unless debt elimination is completed.

Minimum payments will only service the debt interest and do not reduce the debt principal. Therefore, repay as much as you can every month. Set aside a minimum percentage of your income for repayment debts and try to exceed it every month.

Do not bother about any conventional investment schemes such as bonds or unit trusts when you have outstanding debts to repay. The average returns of such investment will never be higher than the absolute interest rates charged by your creditors. Just eliminate your debts as fast as possible from your salary check.

Taking a debt consolidation loan can be useful for some people as long as you negotiate for a monthly payment amount that will quickly eliminate all debts while still being manageable for your lifestyle. Do not ask for lowered monthly payments to carry on your extravagant spending habits or debt elimination will not be possible.

Do not prematurely withdraw from your retirement savings account to repay your debts. This will incur a withdrawal penalty as well as federal and state taxes, which may end up higher than the interest rates charged by your creditors. More importantly, you will be putting your future at risk.

Negotiate and bargain with your creditors to lower or even freeze further interest on your outstanding balances. You can do that because they do not want you to file bankruptcy and discharge your debts automatically.

When you need to buy a house or a car using loans, note that the more time you choose to repay the loan the worse off you end up being in debt. If you choose to service the minimum monthly payment sum, you will have to slog for many years not for yourself, but to make the banks richer. For example, you buy a $300,000 house happily with a $200,000 mortgage loan over a 25 year repayment period. You will probably be paying a total of $600,000 in the end, which means you are actually paying more than double just for the interest fees alone. While it is understandable and many people had no choice when it comes to buying a house because of marriage and such, you do have a choice when it comes to high priced lifestyle items such as cars and home entertainment systems. While these cost lesser than a house, their interest rates are actually higher than house mortgages. Although it is fun and tempting to start enjoying life on credit, it is not so fun after all to slog for clearing your debt and interest fees. A final debt elimination secret is that by postponing your purchases by just one year so that you have enough savings and uses lesser loans to cover these items will greatly ease your loan repayments.