If there’s one chunk of credit that you need to try to avoid, it would definitely be high interest loans of any kind. And this includes credit cards. Once you start falling behind on your credit cards, you’ll notice that your interest rate gets higher and higher. That means that any payments that you do send in are mostly interest only payments. And that, friends, is not in your favor. Interest benefits the credit card company more than you, because that’s how they make their money. So as long as you are trying to get out of debt, you need to balance between interest and principal as much as possible.

Putting a target on high interest debts of all kinds is the best way to get out of debt. We’re not saying that you get to ignore that 0% interest credit card that you have — but it does mean that you really need to start thinking about the big debts that are hanging over your head, costing you a lot of money in terms of interest. Those are the debts that are going to slow you down.

Thankfully, it doesn’t have to be this way at all. You will want to make sure that you’re thinking about the type of debts that you have. Are they already in collections? If that’s the case, then you really need to make sure that you’re negotiating as much as possible. You have to think of it like this — once it’s in collections, the damage has already been done. The collection agency is looking to get paid, and they know that you’re going to eventually pay them. So what you’re going to need to do is try to settle with them as much as you possibly can. Not every collection agency is going to want to settle or work things out with you — but it is possible to make the effort.

High interest debts that are still out of collections you can still make arrangements for. For example, if you have a valid reason on why the debts are hard to pay, you might be able to skip a few payments until you get back on your feet, or have your payments reduced. However, you’re going to be taking some interest hits if you take this tactic.

It’s going to be up to you to figure out exactly what you want to do when it comes to your finances, but you are going to have to eventually have to make some decisions. If you already have the beginnings of your financial blueprint in place, refer back to it. Seeing your goals in print will make it a lot easier to get where you really want to go in good time — good luck out there!