How fast has January has flown by? We’re now well and truly stuck into the New Year with Christmas already feeling like it was such a long time ago. Saying that, I’m sure it’s still making it’s presence felt. Hopefully, that will largely be as a result of abiding memories of good times with friends and family! And not only in the piles of presents I’m still to find homes for in Olivia’s room!
But the reality is that, for many of us, the Christmas fun can often lead to a bit of a spending splurge. It’s not necessarily recklessness: the holidays naturally come with all sorts of hefty expenses like gift shopping, food, drink, travel and the rest. These are often vital components of a good holiday, so no one need hang their head in shame.
However, it can get expensive. So it doesn’t really come as too much of a surprise that many British consumers still expect to be paying off their credit card debt from Christmas 2016 a year later. The good news for those who feel that they may be in the same boat is that there are ways to get ahead of the game…
How To Reduce Credit Card Debt.
Credit cards are very handy because of their convenience, not to mention the fact that they can be very useful when it comes to building a credit score. In addition, they tend to offer very good reward schemes, such as cashback, air miles or free insurance.
However, where so many Brits fall foul is by not clearing their balances each month, and instead making minimum repayments. This can leave you exposed to the sky-high rates of interest charged by credit card companies. Meaning a high chunk of your repayments are lost to interest.
A clever way of avoiding this is to transfer your credit card balance onto a new, 0% card. This will give you a window of opportunity to chip away at your debt; interest-free. There are some excellent deals out there in this respect. Many card providers offer an interest-free period of more than three years.
Debt consolidation loans.
For many, a balance transfer credit card will be a no brainer. But it’s worth factoring in that there are usually fees involved. However, if you are unable to clear your balance within the fixed period, you will generally be subject to hefty rates of interest once again.
As such, for some individuals, it may make more sense to look towards consolidating credit card debt. This can be done with a personal loan. The logic behind this is simple: take out a low-interest loan to pay off all your high-interest obligations, thus making the cost of debt cheaper. And given how quickly and easily a personal loan can be applied for online, it can effectively start saving you money within days.
Good old-fashioned saving.
If neither of these options are appealing, there is a third. This is a tried-and-tested approach which can get you back on track: saving. It doesn’t mean you need to shut up shop for the next while, and derive no enjoyment from life at all. But often it can help to put pen to paper and do a basic budget of all your outgoings. It may sound like a rudimentary exercise, but it will almost certainly reveal some very easy wins in terms of making savings. For Example, this year I have a metal money tin in work, along with my boss. One Each. We will be putting a small amount in out of our wages each week. For him, it’s £1 a day. Myself? I’m doing £5 a week. We will then open our tins right before we both go on our respective holidays. Easy simple savings!
So set yourself targets for how much you want to pay off each month. Then do your utmost to stick to the plan. It may mean saying no to a few fun things here and there, but ultimately pulling yourself out of debt can be very rewarding. By ingraining good habits, you can then set yourself and your family up nicely for a solid financial future.
Do you have any tips to reduce credit card debt? Or are you looking for ways to earn an extra income from home this year? I have more tips to help you improve your finances by earning online.