Here are five simple steps you can take to clear your credit card debt and get to grips with your finances.
1) Pay off debt with savings
If you have credit card debt and are still saving, that means you are effectively paying to save. You are likely getting a much lower return on your savings than the amount you are paying out in interest to the credit card company. You are losing money. Stop saving now and prioritise paying off your debt.
2) Get the best interest rate
To get the best interest rate, you first need to list the outstanding balance, interest rate and minimum monthly payment for each of your credit cards, with the highest interest rate at the top and lowest at the bottom.
Second, total up your outstanding balances and your minimum monthly payments. Next, you should check out our 'Best 0% balance transfer credit card deals' page and switch your expensive debt to a lower rate. This means that a higher percentage of your monthly payments will go towards clearing the capital you owe and not be eaten up by interest charges, which means you will slash the time it takes to eradicate the credit card debt that burdens your life.
Finally, make sure to remember to always restructure your debt when the 0% short-term deal ends, if you have not cleared the balance by that point.
3) Build the best repayment plan
To build the best repayment plan, first make sure all your monthly credit card payments are set up as a direct debit. Second, make sure all the direct debits are set up for the minimum monthly payment except the one with the highest interest rate. Next, the direct debit for the highest-interest credit card should be set at the maximum you can afford. If you are serious about paying back what you owe, put every spare penny you've got into clearing this debt fast. Finally, once you have cleared the balance on the most expensive credit card, repeat the same process on every card down the list until you are free from credit card debt.
4) Stick to your plan
Repaying your credit card debt will take time. Work out when you think you will be credit card debt free and put this date in your diary. Always remain focused on this goal.
5) Cut up your credit cards
This way you will never return to the old days of your credit card debt being out of control.
If you need more help paying off your credit card debt, you should reach out for free debt advice. We explain more in our article 'Where to get free debt advice'.
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