When you are in credit card debt it may seem as though you will stay in debt forever. If you are making just the minimum repayments to your debt then you may find that this amount is just covering the interest alone and your debt level is not decreasing.
Your credit card debt may be so bad that you are thinking about going through the bankruptcy process. If you are in this situation then you need expert debt advice, contact One Advice today to see how we can help you.
If you know how to pay off credit card debt by following some of the suggested tips below, you may find that you can pay off your debts much quickly than you imagined and that you can become debt free.
1: Prioritise your Finances
Before you even think about how to pay off credit card debt, you need to get other areas of your financial life in order. Look at all the bills that come through your door each month and work our which ones are your priority.
A Priority Debt is a debt which has to be paid or you risk losing the service. For example, your mortgage is a priority debt as if you fail to make your mortgage payments you could lose your home.
After you have done this you should be left with two piles of outgoings: Non Priority and Priority Payments. Make sure that you pay the priority debts first then we can move onto working out the best way to pay off credit card debt.
2: Which Credit Card Debt should I clear first?
There are a number of different ways for you to clear your credit card debt and you may prefer one technique to another.
a) Highest APR
The idea of this exercise is that you reduce your credit card debt as fast as possible. There is the chance that you are paying huge differences to your debt; store cards usually have a much higher rate of interest than credit cards.
Tackling the debt with the highest APR means that you should be paying less interest in the long run.
B) Transferring your Balance
Interest rates are changing all the time but, if you have a good credit rating, you can transfer your credit card debt onto a card which offers 0% APR for balance transfers.
Be aware that the interest fee period is for a limited time only and ensure that you cancel the cards from where you transferred the debt, otherwise there is the temptation for you to carry on spending.
3: I can’t afford to make the minimum payment to my credit card debt
If you cannot afford to make the minimum payments to your credit card debts, there is no need to panic. One Advice can offer you expert advice about your debt problems.
We may be able to offer you a number of debt solutions which are designed to make your credit card debt more affordable to you, such as a debt management plan. Call our debt advisors today on freephone 0800 048 1752.