Having a credit card can be an extremely useful thing when unexpected life events happen, from medical bills, your car breaking down, surprise wedding expenses, to that extra money needed while overseas, even when you are careful about your day-to-day spending, things crop up and then it adds up.

Even if all your spare cash after rent, bills, food and essentials is going towards paying off your credit card debt, it’s easy to look at the balance remaining and the interest that’s piling up and feel stressed and overwhelmed.

If just being stingy and budgeting harder to make larger repayments isn’t going to cut it, with a little research and planning there are four steps that you could take to get that debt monkey off your back:

1. Do your sums

To make sure you aren’t just trading one unmanageable debt for another you need to be realistic in working out what you can afford to pay and over what amount of time. Drawing up a budget with your incomings and outgoings can be really useful here. Try to come up with a reasonable timeframe and amount that you can afford to pay on a monthly basis.

2. Work out what product is best for you and your debt

When you’ve done your sums and have worked out your timeline and ideal monthly payments the question then essentially comes down to: 0% Balance Transfer Card or Low Rate Consolidation Loan?

0% Balance Transfer Card – If all you need to get ahead of your debt is 12-18 months of no interest piling on to your total then this could be the option for you. A balance transfer allows you to take the balance owing on an existing credit card and transfer it over to a new credit card which usually has a special interest rate that lasts for a defined period of time.

Low Rate Loan – If you need a slightly longer period of time to make sure your payments are manageable, a low rate debt consolidation loan could be the way to go. If you go with a fixed interest rate, you can have the security of knowing your repayments won’t change over time.

3. Use an online comparison tool to make sure you’re getting a better deal

The best way to make sure you know what is out there is to get online and compare the deals currently on offer.  This enables you to compare all the details that matter to you, for example does the product offer early/extra repayments in case you come into some money and are able to pay off some of the total early?

On the Credit Savvy website you can compare hundreds of offers from the leading lenders in one convenient place so you can find the deal that suits your needs.

Some of the key things to look out for are: upfront and/or ongoing monthly fees, transfer fees, early or extra repayment fees, and fixed or variable interest rates.

Make sure that when you have decided what product you want to go for that you have read all the terms and conditions and you fit the criteria because every time you apply for a credit card or loan, it can show up as an enquiry on your credit file and possibly impact your credit score, so be sure!

4. Set up regular payments

Once you have the card or loan and know how much you have to pay each month, set up an automatic payment to the lender so that you don’t miss any of your repayments.

 

Then just sit back and relax knowing that you are on your way to becoming debt free!

 

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