Get out of debt - fast!

11 ways to slash your debt

1. Psych yourself up

"Begin with your brain," says financial coach Nancy Zimmerman. "What works for your personality? If you need to meet a goal quickly to feel successful, for example, there's what I call the fast-and-furious method. Make your minimum payments and also direct as much money as you can each month to one debt(preferably with the highest interest rate)until you get it paid off. This gives you a real 'woo hoo' sense of satisfaction. Then move on to the next bill."

2. Lower your interest rate

Negotiating a lower interest rate on your high-cost plastic is as simple as calling your credit-card company, says Lynnette Khalfani, a money coach and author of Zero Debt: The Ultimate Guide to Financial Freedom(Advantage World Press). "People think that interest rates are set in stone, but credit-card companies know it's a competitive marketplace, so they want to keep you as a customer," she says. "If you have a good history of paying at least the minimum on your cards every month, nine times out of 10 your rate will be lowered on the spot."

Call and politely say you've been a loyal customer for years, but the competition has offered you a better rate and can the company beat it? A new rate of 10 to 11 per cent is a reasonable expectation, but see how low you can go.(This worked for Khalfani herself: before she became a money coach, she had a jaw-dropping $100,000 in credit-card debt, despite a six-figure salary. She negotiated lower interest rates, tripled her monthly payments and cut back on spending, and wiped out the debt in three years.)

3. Refinance your house

Sabrina Sabo, a health-care aide in Stratford, Ont., got a handle on her payments by refinancing her mortgage. She and her husband went to their bank halfway through their five-year term and increased the amount they owed - but kept their interest rate at a decent 5.8 per cent. "With the extra money, we were able to pay down some of our debt(which consisted of student and car loans), and our mortgage payment went up by only $30 a week. Before, our non-mortgage debt payments had been $500 a month because of higher interest charges."

Make sure you shop around to get the best possible rate on your mortgage. Visit www.allcanadamortgage.com to find a mortgage broker in your area.

4. Take advantage of your credit rating

Talk to your financial institution about a personal line of credit. This means it will pre-approve you for a maximum amount you can borrow, and the interest rate will be substantially lower than the 18 per cent or so you're paying on your credit cards, explains Christine Van Cauwenberghe, director of tax and estate planning at the Investors Group in Winnipeg. Your rate will depend on your credit rating and your assets(with more assets, such as a house, you'll pay a lower rate). Use this cash to pay off your high-interest debt. You then repay a minimum amount each month but you can pay off more than the minimum at any time.

5. Start small

Get out of the minimum-payment trap by setting up automatic money transfers through online banking, suggests Jessica Ludgate, an engineer in Whitby, Ont. "Start by transferring an additional piddly $25 a week from your account to your credit card or student loan. You won't miss it, but it adds up to $1,300 a year. Then, as your debts decrease, increase the amount of the weekly transfers." In just three years, Ludgate and her husband zapped $7,500 in student loans and $5,000 in credit-card debt.