Avoiding Credit Card Debt Problems

Unmanageable credit card debts are one of the most common ways in which people in the UK get into financial difficulties. With monthly minimum card payments sometimes being as low as just 2.5% it is easy to see why we find that many people are using their cards just to get by financially each month.

Getting into trouble with credit card debts can happen very easily. If you just pay off the minimum amount each month then it can take years to pay off the debt, all the while wasting money on interest payments. This problem is often compounded when people attempt to juggle balances over multiple credit and store cards.

There are however ways in which credit card debt problems can be avoided.

If you do find that you are constantly struggling to make payments then the first step should be to simply try to reduce how often you use your cards. Credit card interest rates are typically twice as high as those charged on a comparable loan and so using your cards for anything other than short term borrowing is rarely a good option. It is instead preferable to minimise credit and store card spend in favour of less expensive forms of borrowing.

For people that owe money over several accounts then it makes sense to concentrate initially on paying off the balance on the card or cards that charge the highest rate of interest. At least in this way you are reducing the rate at which the debt is increasing.

Another option is to consider transferring the balance to a card with a lower rate of interest. Credit card companies are very competitive and as such shopping around for the best deal makes a good deal of sense.

Clear Credit Card Debt Problems

If the worst happens and you find that you can no longer manage your debt repayments then you may want to consider entering into either a Debt Management Plan (DMP) or the more formal Individual Voluntary Arrangement (IVA).

Both of these types of agreements will restructure your debts into a single monthly repayment and so make it easier for you to manage your repayments. The amount you pay each month will be based on what you can reasonably afford on your current income and essential outgoings.

Independent help with Credit Card Debt

If you're having problems with credit card debt repayments then Royal Exchange can help you. As impartial debt counsellors we can advise you on all your options to get your finances back on track. 

For more information and advice on how to deal with credit card debts call our helpline today on 0800 028 4422.