How can I get out of credit card debt?
Getting into credit card debt can happen quickly. Getting out of it can take much longer. If you’ve decided you’d like to be free of the worries that come with high balances on credit cards though, these simple steps could help you make real progress.
Step 1 – stop spending money on credit cards
It’s tempting to spend the odd few pounds here and there when you’re a bit short. Cut the cards up or put them somewhere you can’t get to them easily: in your freezer is a good idea, frozen inside a bag of water. Make a note of the numbers first in case you need to speak to your lender. Delete them from your online shopping accounts too – it’s easy to get carried away online.
Step 2 – let your credit card lenders know you’re taking action
A letter to your credit card companies will help them understand your situation, and most credit providers look well on people who want to be pro-active in bringing down debts. They’d rather know you don’t want things to get out of hand, and you’re taking action, than find out you just can’t pay. Some companies may even offer you an alternative interest rate (but you need to be aware that may mean paying back the money over a longer period of time).
Step 3 – manage minimum payments sensibly
Pay off the card with the highest rate first. The higher the rate, the more money you’re paying back on top of what you borrowed. Get high interest debt paid off as quick as you can: it makes sense to transfer credit to a lower interest rate if that’s possible, too.
Step 4 – Try to keep your payments up to date
If you miss a payment it doesn’t take long for charges to mount up. If you’re just paying the minimum every month, try to pay a little more, even if it’s just a pound. It all helps to get the debt cleared.
Step 5 – hunt for ways to help yourself
By budgeting wisely, you have more money left over to spend on the things that matter. In this case, the comparison websites may be a good starting point: look at your utility bills, see if you could save money with another supplier. And then put what you’re saving towards paying off your cards.