Oprah’s Debt Diet Step 7: Prioritize Your Debts and Raise Your Credit Score (From oprah.com)

By now, hopefully you’ve found some money. So, the next logical question is where do you put it? Where do you put it so that it will make the most difference in your credit score, naturally, but also in your life?

You’ve already been given a plan for paying back your credit cards. Sometimes though, those cards should not be your top priority. Here’s why: You have two types of debts. Secured debts are those that have assets backing them up—they can be repossessed or taken back. They include your home and your cars. Unsecured debts are those with no assets backing them up. If you don’t make a payment on your credit card, the bank is not going to come and take back the blue jeans you bought at the mall. It might make your life miserable to have a collector call you at all hours, but the credit card company is not going to take away your place to sleep or your transportation to work.

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Oprah’s Debt Diet Step 6: Take Big Steps to Grow Your Income (From oprah.com)

What if you’ve gone through the first five steps and you can’ t free up enough money to start repaying your debts in a big way? Then you have three choices. You can consider whether the big-ticket items in your life—your home, your cars, private schools—are truly necessary. You can go through your home and your possessions and see if there’s anything of value to sell. You can earn more money, either on your current job or—more likely—by taking on a second one. The other alternatives? Credit counseling and bankruptcy—but you’re not there yet. For now, let’s see what you can accomplish on your own.

Here are some options you may want to consider.

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Oprah’s Debt Diet Step 3: Learn to Play the Credit Card Game (From oprah.com)

The CARD Act of 2009 was congressional legislation designed to protect consumers and requires that your credit card statement chart how long it will take to pay off your balance if you only make minimum payments monthly and not add any additional charges to the account. It also must indicate how much you need to pay monthly in order to pay off the debt in three years. In addition, it must show the estimated total you will end up paying for either option you take. It’s amazing to see how motivated one will become when seeing the amount of money saved by paying the three-year payment plan! By the way, from the time that the CARD Act was passed until it was enacted, some banks increased the minimum payment from 2 percent to 4 percent of the balance, thus decreasing consumer monthly cash flow.

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Oprah’s Debt Diet Step 2: Track Your Spending and Find Extra Money (From oprah.com)

Part 1: Find Your Latte Factor®
Now that you know how much debt you have, you need to find out where your money is going! My Latte Factor® is a simple concept that can help you get out of debt. If you put just$10 a day towards your debt rather than spending it on fancy cups of coffee, cigarettes, bottled water or fast food, in one year you could put $3600 towards your debt!

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