Being in debt can be tough on your emotions. But know this: it’s something that millions of people are going through right now. According to the charity Credit Action, household debt is currently over $70,000, including mortgages, meaning that the vast majority of people owe other people money.
The reason many people get into trouble with debt doesn’t usually have much to do with their choices to take on debt. It often has more to do with the fact that they choose to ignore debt problems when they arise. The biggest issue is people living in denial, pretending to themselves that they will eventually get round to sorting out their debt problem, but never actually doing it.
The good news is that getting rid of your debt is simpler than you realize.
Transfer Your Credit Card Debt To 0 Percent
Want to know how to improve your credit score? It’s simple: deal with credit card debt. One of the ways to deal with credit card debt is to transfer all your expensive balances to a 0 percent balance transfer credit card. The great thing about these cards is that they help you to avoid all interest charges on the debt you accrue for the first few months of any deal. This provides you with some much-needed relief and gives you the opportunity to get your finances in order.
It’s imperative that you manage to pay off any outstanding debt during the trial period, or you’ll start getting charged interest again, so make a plan to do so.
Explore Alternatives To Using Your Overdraft
Paying huge sums of money in overdraft fees and charges can actually make your debt problems worse. Most banks charge a fixed fee for overdrafts every month, rather than a rate of interest, which can lead to enormous payments for small sums of money. Often it’s cheaper to get a short term loan, rather than pay bank charges because the effective rate of interest is lower.
Some accounts offer a 0 percent interest overdraft for the first few months after joining as an incentive to join their bank, and so it might be worth switching banks. Some banks, however, will do a credit check before accepting you for a particular deal.
Use “Snowballing” – The Debt Busting Technique
Snowballing is a debt-busting technique that has been utilized for a long time, ever since people started taking on multiple forms of debt. It’s a simple idea. You start out by paying off your highest-interest debt while paying the minimum on everything else. Credit cards and bank overdrafts usually charge the most interest, while car loans and mortgages charge the least.
People who use the snowballing technique often report that it has positive psychological benefits. It feels good, they say, seeing your list of creditors decline.
Look For Advice
Despite your best efforts, sometimes it doesn’t seem possible to work your way out of your debt predicaments. In these situations, it’s best to call a helpline and get advice for free from a professional. Clearing debts can sometimes involve major life changes, like moving to cheaper accommodation.