New Year, New Finances: Credit Cards

If you’re like many families in the UK, you’re probably dreading seeing your latest credit card statement following Christmas and New Year. Much of the cost of presents, food, drink and parties is likely to have been whacked onto the “sod it” card, and much like yourself, that debt is now sitting around slowly getting fatter from the festive excess.

If you’re suffering from some credit card flab, what options do you have to sort out your situation?

Here are a few ideas:

  1. Find out how much you owe – this won’t help you get out of debt, but it’s a good place to start. Many people like to bury their head in the sand and hope the problem will miraculously disappear – face it, that’s not going to happen. Work out exactly how much you owe and you’ll be in a better to position to deal with it.
  2. Get rid of high interest cards – as well as finding out how much you owe, find out which cards have the highest interest rate. And then get rid of them.
  3. Use cards for essentials only – Don’t exacerbate the problem by making more purchases on your cards. Only use credit cards when absolutely necessary.
  4. Overpay on the card that costs you the most – possibly one of the best ideas is to pay off your most expensive debt first.
  5. Consolidate your debt – if you can find a credit card with a 0% balance transfer deal, use it. Make sure you watch out for the charges though, as credit card companies are increasing the amount they charge for moving your balance to their 0% cards. You’ll still have to make sure that you either start paying off the debt wehn your 0% deal ends, or alternatively transfer to another 0% deal.

What are your plans for reducing credit card debt? How can you cut down your credit card use? Feel free to comment below.

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