Are your finances on the brink?
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If your finances are in bad shape and the idea of putting money aside for a rainy day seems like a far-off dream, try these tips first.
Step 1: Cut back and budget
Cut back on spending as much as possible and try to stay off the high street to avoid temptation. Draw out a lump sum of cash at the beginning of the week and leave your cash cards at home so you can’t spend any more. Plan a strict budget and then stick to it. This is a good discipline and should help you reduce your debts much more quickly.
Step 2: Watch your interest charges
Take a look at the interest rates on your different debts. For example, if you have a large bank overdraft you may be paying a higher interest rate on this than you are on your credit card. Likewise, if you have different credit cards they may be charging different amounts, and store cards are likely to be the most expensive of the lot.
dealing with debt
If you have significant debts that you know you won’t be able to pay off in the near future, you could think about consolidating them on to one low-rate credit card and commit to repaying a fixed amount each month.
Step 3: Find a low-rate card
Credit card customers who carry a balance on their card for many months need to shop to make sure they’re getting the best deal they can.
There are a variety of cards offering 0% on balance transfers for 12 months or more, including Barclays Platinum and Flexi-Rate, Virgin, Capital One Platinum, Tesco Bonus, MBNA Platinum and Halifax One among others – although all these cards do charge a balance transfer fee. Once you’ve moved your balance to one low-rate card, cut up the rest of your plastic to prevent yourself building up any more debt.
