As the Christmas season dies down, the financial aftermath has set in. Unfortunately, many of us fall into a spending trap during the festive period, adopting a lifestyle that is far from suited to our bank balance. We depend on plastic to fund the festivities but pay for the ease of expense long past December. If you’ve been left with a monetary hangover, it’s important to find a remedy to suit your financial needs. Give yourself a financial lifeline by undertaking the following credit card clearance methods:
Cut up your credit card
The earlier you tackle debt, the sooner you will be able to clear it. You must avoid falling into greater debt at all costs. If you have to use your credit card, only use it in real financial emergencies. Otherwise, spend cash only. Exchanging cash will emphasise your spending habits as your wallet will immediately feel the effect. Using an ATM will also allow you to monitor your money more carefully.
Use savings to clear credit card debt
Paying off credit card debt is one sure fire way to be financially fit. Many people fail to recognise that the interest you receive on your savings is far less than the interest you are paying on your credit card. It does not make financial sense to build up an ‘emergency fund’ while tearing down your credit rating. Once your debts are cancelled, you’ll start to make tangible savings.
Revise your repayment programme
Put a realistic repayment plan in place. If possible, pay off more than the minimum every month. Setting up a direct debit is the most efficient way of making monthly repayments. If you can afford to increase repayments, then do so. Life outside of the debt trap is worth saving for.
Shift debt to interest free card
If possible, transfer your debt from one card to another. If one of your credit cards has an interest free period, place all debt on to that card. An interest free rate will minimise your debt and give you greater financial security. However, avoid shifting your existing debt to a new card if you have a poor credit history as a failed application will only further hinder your credit rating.
Tags: finance tips
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