Racked up big credit card debts in the last few months and worried about how you will pay them off? Here are our top tips to help you get back on top of the plastic.
Rank your cards
Not all credit cards are created equal. They all have different interest rates and some come with interest free periods.
If you have borrowed on multiple cards, then you should get all your bills together and compare the cards. You want to find the cards with the highest interest rate and prioritise this card while making minimum payments on the others.
After this you can work your way through the rest of the cards, until you get to the card with the lowest rate. This will be the most effective way of paying off your bills.
Increase monthly payments
The higher your monthly payments, the faster you will pay down you credit card debt.
If you have spare money each month, putting it towards your credit card debt will save you money in the long run, by avoiding further interest on your balance.
If you don’t have any spare money but you want to increase your payments then you will have to look at ways in which you can boost your income or watch your expenses more closely and create a budget.
Transfer your balance
One of the most cost-effective ways to tackle credit card debt is to reduce the amount of interest you’re paying.
You can do this by transferring debt to a new card with a 0% balance transfer deal. Many cards allow you to transfer your balance and not pay any interest for a set period of time – up to three years with the best cards.
With many cards, you will usually have to pay a fee to make the transfer, so you will have to weigh up whether it will save you money.
Get professional help
If you are struggling with problem credit card debt and you can’t see any reasonable way of paying it off, then you should seek debt advice from a professional.
There are several personal insolvency services that can help people with credit card debt. For many, using an Individual Voluntary Arrangement (IVA) is the preferred choice.
An IVA is a formal agreement between an individual and any unsecured creditors to pay an affordable amount each month for a period of five or six years. Once the IVA timeframe has elapsed, any remaining debt is written off.
Are you struggling with problem debt? Speak to a member of the team today. Call: 0800 611 8888.