Credit Card Debts
The last decade or two has seen an explosion in the use of credit cards. Where once they were rather uncommon, and widely seen either as a status symbol or even slightly exotic, they are now all but ubiquitous. Older generations tended to be wary of debt, but this attitude is now mostly gone, and debt is pretty much a way of life, and credit cards are at the forefront of this.
While credit cards in themselves are not dangerous, and can be a great convenience, the easy availability of credit which has now ended led to millions of people racking up a collection of cards, and the temptation to spend now and pay later has meant that many cardholders are now confronting the fact that they have uncomfortable or even dangerous levels of debt.
What can be done to minimise the damage that credit card debt can do?
Paying More Than The Minimum
The first step to getting free of credit card debt is to make sure you pay more than the minimum amount required on your monthly statements. If you stick to this amount, most of your repayments will be swallowed up by interest leaving your debt all but untouched. Paying a little extra each month, or a lot extra if you can, will pay dividends in drastically reducing the length of time it takes to clear your debt, and therefore the amount of interest you have to pay over its lifetime.
Balance Transfers
If you have a large balance on an expensive card, it makes sense to move this debt onto a cheaper card, or even one with an introductory 0% deal. This was common practice up until recently, but the credit crunch has seen balance transfer options getting ever more limited. It's still worthwhile doing though if you can get yourself approved for a card offering a low rate or lengthy 0% deal - and take the opportunity to drive your debt down as fast as possible rather than letting your balance linger.
Debt Consolidation
Credit card debt is one of the most expensive forms of debt there is. It's long been suggested that shifting this debt onto a cheaper form of credit, such as a personal loan, is a good way to lower your interest rates and your monthly payments. This process of debt consolidation is not as easy and effective as it once was, given the difficulty in getting reasonably priced credit, but can still be worth doing. Just make sure that once you've cleared your cards you cut them up and cancel the accounts, or you could end up in an even worse situation - racking up new credit card debts while still owing the money you borrowed to clear them.
Stop Spending!
Whichever route you take to tackle your credit card debts, the most important thing you should do is to stop spending any more on them, or all your efforts will be in vain!
All information is for a general readership and doesn't constitute financial advice.
Consult with a qualified independent advisor for personalised debt help and advice.
