When the monthly salary is coming in and there are far more important issues to be dealt with it is all to easy to pay the minimum required and let the debt build up. BIG MISTAKE!
Your number one Financial New Year Resolution should be to get that debt under control and not let it build again. This is not really one of my areas of expertise but here are a couple of thoughts and some links which may be helpful.
- Put a plan in place to repay the debt even if it is going to take 12 months or more. If necessary, suspend savings such as ISA accounts or even pension contributions. The interest on your credit card debt will always be more than the interest on savings accounts.
- Go to Money Saving Expert – Credit Club. This is the best starting point for trying to move or reduce debt. It will give you your credit score and let you know whether applying for a new card is in your interest.
- Look at transferring your balance to a 0% credit card. Watch out for transfer fees – as low as possible but 2.5% max. Again Money Saving Expert is the best place to start.
- Get some personal help and guidance. The Financial Freedom Fighter service is excellent whether you are really struggling with debt or just need someone to sort you out. If you have credit card debt the banks really love you. That’s the sort of love you could do without!!
Seriously, it is worth taking the time to sort this out once and for all and stop it getting into that state again.
Saying all that, one thing you should always use you credit card for is paying for flights/holidays, or for that matter any major purchase. Your consumer protection is much improved, but make sure you set up the online payment of the credit card bill at the time of the purchase. Otherwise you will be on the slippery slope again.
One good thing about credit cards. I have arranged one for my step-son. He just puts his petrol on it, has a direct debit to pay it off in full every month and is building up a very good credit record for when he moves on to house purchase etc.
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