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.
The minimum payment on a credit card is the lowest amount you can pay towards your balance each month without triggering a penalty fee from your lender and a mark on your credit file. A credit card minimum payment is usually calculated as a percentage of your outstanding balance, though it could also be a flat fee if the percentage is too low, plus interest charges and fees.
Your credit card minimum payment is the lowest amount you can pay towards your debt, but it is not an effective way of clearing your credit card balance. If you want to pay off your debt as quickly as possible, you will need to pay more than the minimum amount.
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.
For some people, the best way to manage credit card debt is to get expert help. In the UK, there are a whole host of great organisations that can connect you with experts and advocates who can walk you through the steps you need to take to get to grips with your finances.
Debt is not something you have to tackle on your own. There are a whole host of free and independent services out there that can help you turn your financial troubles around. The right advice can set you on the way to managing your debt and controlling your money once again. It is important to go to the right place for debt help. You may see adverts for companies offering to reorganise your debt or help you manage your finances, but many of these services will cost money. If you are struggling with debt, the last thing you need is an extra bill.
The organisations that can really make a difference are charities that specialise in free debt advice. Below are some of the first names to reach out to if you are struggling with debt.
| Organisation | Website | Phone number |
| Citizens Advice | Citizens Advice (England and Wales) | 0800 240 4420 (England and Wales)
0800 028 1456 (Scotland) 0800 915 4604 (Northern Ireland) |
| StepChange | StepChange | 0800 138 1111 |
| National Debtline | National Debtline | 0808 808 4000 |
| Debt Advice Foundation | Debt Advice Foundation | 0800 043 40 50 |
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