On average, around 200 each more than the same period the previous year. Many people in the UK now carry credit card balances equalling a year's salary. On top of this, huge numbers made little attempt to pay off the balance. Opting instead to pay the minimum balance requirements of each month.
This can be a slow and painful financial death by credit card payments. There is no reason why you should not get a grip of the situation and turn it around to make your credit card debt more reasonable.
The economy is slowing down, the housing market is in a bad way and unemployment is slipping ever higher. So now is the time to try to reduce your credit card debts, if not even eliminating them altogether.
There are several steps take to help yourself onto the ladder that will eventually allow you climb out of any credit card debt problems you may have. The first rung of this debt clearing ladder is to create a budget. This sounds a little daunting, but it really isn't that difficult. Most people who have money problems also do not have a budget; this simple tactic can change your financial situation.
You need to get all your paperwork and bills together to work out how much you actually are spending every month. And also how much of that actual inescapable expenses. And just what things that you can cut down on or eliminate.
First of all calculate your expenses that come in every month, such things as car payments, credit card payments electricity bills and so on. The next thing to do is work out exactly how much your household income is per month.
Unfortunately, you may well find like millions of people in the UK that the amount that comes is actually lower than the amount that is going out. This should not come as a surprise as this is the reason why your credit card debt is increasing each month. So, you will need to make cuts, figure out what you actually need to keep and what are the things that you can live without. This may not be big items it may only be regular small items.
For example, do you always stop at the coffee shop on the way into work every morning and pick up a cup of coffee. Just think how much that adds up too five days a week. How much is that month? How much is that year? It is not hard to figure out where a lot of your money is going. If you repeat this exercise, with everything that you spend it may give you an idea what you can cut back on.
Your grandmother probably used to have envelopes with cash in them, one for the gas bill. One for the catalogue man, one for the milkman and so on. This was a good way to budget, in her day and it still is today. It's a simple system that helps you to know exactly how much spare money you have available.
Start using your credit cards sensibly; it is not good idea to start pulling out credit card every time you don't have sufficient cash to pay something. Credit cards are not free they have to be repaid. Many people seem to be under the impression that if they put payments on plastic in never has to be repaid.
You should start to consider your credit card as a useful tool to help you to budget each month. Not an excuse to spend money that you don't have, you could freeze your cards for a month or two. This is a simple exercise, take the cards out of your wallet place on them in an envelope, seal it up with a date on the outside and don't open it up before that date.
Start paying off your cards. To do this obtain exact balance for every card find either the one of the highest rates of interest or one with the lowest balance. Concentrate on playing that card off, only pay the minimum on all your other cards until that card is paid off, and then do the same the next card, and so on.
If you have sufficient income, and you can afford to make more than the minimum payment on more than one card that will make a significant difference to the balance.
If you pay the minimum on the card each month, how long do you think it will take you to pay off the entire balance? A year? Three years? In fact, the average length of time to pay off a credit card debt by paying the minimum is 18 years. That equals a shockingly large amount of interest, so that is something you need to consider next time you think that it's a good idea to just pay the minimum this month.
Another option is a debt consolidation loan that will pay off all of your cards leaving just one simple monthly payment spread over a number of years. This will save you a huge amount of interest and will also actually cost a lot less per month, allowing you to repair your finances.
Credit card debts and not the end of the world is possible to fight back and resolve your problems, it takes determination and hard work, but it can be done
Are you among the millions of consumers looking for ways to consolidate credit card debt and manage your finances better?
While it is important to get a good handle on your credit card accounts and ensure that you haven't extended yourself beyond your means, consolidating credit card debt itself can sometimes create even more financial hardship if you don't take great care in how you approach this significant financial issue.
A very common and indeed tempting way to consolidate credit card debt is to transfer the balance from one credit card company to another that is offering a zero or very low percent balance transfer offer for a limited period. Beware! What do I mean?
You might well have several cards that you want to consolidate your borrowing on. It is quite common for most of us to have several cards with varying ammounts owing on them. They might all have different interest rates applying to them which can be anything between sixteen and thirty plus percent.
If you are able to transfer the bulk of the balance to one or more cards with zero or low interest rates you can save a small fortune immediately. Now that has to be great news - yes?
When you are about to consolidate credit card debts there are some things you need to consider.
Are you aware that each time you apply for a credit card they do a credit check on you and it leaves a record on your credit file? So if you know you are probably not going to get an offer to transfer money, do not apply as it will only show you in a poorer light on your credit score.
The "special offer rate" is just that and will increase at some point in the future so make sure you know up front when the rate will go up and most importantly by how much. You might find it is worse than what you are paying now.
Do not put that nice new card into your wallet where it will be a temptation. It will be saying to you "look, there is nothing on your statement and you have all that credit available to spend"
Many people fall into this trap. It is not so much how much credit you have to spend as how much more debt you can easily fall into. Don't do it! You will get deeper into debt and the credit card company will watch you do it with glee. Credit card companies are not your friend, they are only bothered about one thing - PROFIT - PROFIT. If you can, put that card away somewhere safe and resist the temptation to carry it around with you.
The Trap Is Set
OK so now you have consolidated some of your credit card debts and have a nice new rate of interest to go with it, and life feels a bit easier right now. Read the small print carefully because what often happens is frightening. You have a bit of a surplus on your new card over and above the total you consolidated and you think to yourself I deserve a treat. So you go out and spend a little bit more on that new card because you can. The trap has sprung!!!!
You may well find that when you make your monthly payment on that consolidated debt you are only paying off the consolidated part of the debt and the new spending is not actually reduced at all until the original transfer is cleared. In the meantime the interest on that little treat is going to hit you hard as it is new spending.
What's The Secret?
When you do a balance transfer to consolidate credit card debt NEVER SPEND on this card unless it allows you to pay off the new spend first because it will cost you dearly! Simply use the special offer to your advantage and ideally only if you can clear the debt off within the offer period before the rate suddenly shoots up.
It's quite simple to consolidate credit card debt by doing balance transfers to a company with a lower rate of interest, but be careful how you manage the new card. Credit and debt have to be managed wisely, or you may find yourself in serious financial trouble.
I hope you find this article useful and you can start to use credit card debt consolidation offers to help you, not the credit card companies.
Both Joseph Kenny & Ian Middleton are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Joseph Kenny has sinced written about articles on various topics from Credit Cards, Debt Consolidation and Credit Cards. Joe Kenny writes for Credit Cards Web, offering or onlystop.com for some great. Joseph Kenny's top article generates over 550000 views. to your Favourites.
Ian Middleton has sinced written about articles on various topics from Credit Cards, Business Loans and Make Money Online. What Would You Rather Be - Struggling With Mounting Credit Card Debts or Learn How To Become Debt Free? For full details of that journey to financial. Ian Middleton's top article generates over 1300 views. to your Favourites.