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There is a general sentiment that debt management is actuallythe same thing as debt reduction. However, there is a definitedifference between managing your debt and reducing it. Management onlyrequires that you keep it from spiraling completely out of control,while reducing it and getting rid of debt means that you are actuallyactively working to rid yourself of debt. While debt management cankeep your head above the water, and can be a useful tool for a time inorder to preserve your good name, it does nothing to actually help youget out of the water.

Debt management mainly consists of shifting debt around in order toavoid having it crush you. There are a couple of ways to approach debtmanagement. One of them is to continually get debt consolidation loans,or use balance transfers on credit cards. Shifting credit card balancesto cards with lower interest rates or even special zero percentintroductory rates can save money. Many people then use the extra moneysaved by getting a loan or transferring balances to buy things thatthey need or want. With a credit card freed up, many people set workmaxing that card out. This is management, because instead of usingextra money to pay down the debt further, one is using the money to doother things, and getting in to more debt. The debt does not drown you,and you have created some breathing space. But, because you areconstantly spending, especially with credit card balance transfers, youare increasing your debt. Eventually, even with the most clevermanagement and shifting about, the debt will eventually catch up withyou, and you will be left with no more options.

Another form of debt management is to shift it about, and then livewithin your means. Rather than spending anew on a recently freed upcard (by a shift to an introductory rate), the paid off card is cut up.People who choose this route are merely managing their debt becauseinstead of actively paying more than the minimum to reduce the debt,they are just keeping out of trouble. Many people get debtconsolidation loans to ease the payment schedule, and then make aneffort not to incur more debt. They are not actively reducing the debt,but nor are they adding to it. This is a safer way to go about thingsthan the former tactic. However, this will result in more money paid ininterest in the long run than if one had taken an active debt reductionrole.

Either form of debt management can provide tools for keeping you afloatin tough times. It can provide breathing room, and allow money for someessentials. However, any debt management will result in a lot of extramoney paid in interest. With a little extra discipline, the debt can beagressively reduced and more money can be saved for your use over theyears, instead of going to interest charges..

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• Becoming Debt Free Faster