Getting Rid Of Debt
Many people with multiple credit cards often let their spending get out of control and end up with major debt problems. If this happens to you the very worst thing that you can do - and it is very easy to do - is burying your head under the sand and trying to forget about it. Credit card debt is very real, and just because you have forgotten about it doesn't mean it has somehow vanished. Once your spending gets out of control and you get into debt you must take action! If you don't your inaction will appear on your credit report, which will then have a negative impact on what you can do financially in the future.
To help you tackle you debt problem we have drawn up a list of things that you can do to help address the problem, starting here:
- Find out exactly how much money you have at your disposal. Get your monthly payslips and tote up what you have outgoing. From that you can find out how much you have available to pay back your debt.
- Even though you have to pay back your debt, you still have to live. Calculate your monthly household expenses including all your utility bills, food and general living costs. Try and cut back as much as you can with them.
- Find out exactly what you owe, across all of your credit cards and loans. Then calculate what you owe based on your APR and interest rate. Allocate as much money left over from your budget to paying back your debt.
Once you have established what you earn, your spend on the cost of living and what you owe you can begin to see a clear picture of where you stand. Now you can start to tackle the debt. Here are a few tips:
- Transfer your credit card balance to a 0% interest credit card with a low APR.
- Renogiate the repayments on any loans you have.
- If you are paying a mortgage you can move your mortgage to a lower interest mortgage.
Try and consolidate your debts - so if you have multiple credit cards with outstanding balances you should transfer them all to one single low APR card as soon as possible. This will make managing your debt much easier.
If you cannot move a credit card balance then you need to prioritize who you pay out first. Start with the lowest outstanding balances and pay them off first. This will reduce your overall monthly repayments, leaving you with funds that can be used to repay your debt.
Above all else, do not add to your debt! Put away your credit cards, do not apply for any more cards or loans.
So in rounding off, here are some motivational tips.
- Establish all your expenses.
- Consolidate your credit cards and loans.
- Pay off the smallest debts first.
- Stop using your credit cards - start using cash.
- Set yourself a realistic budget.
- Stick at it!
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