Ten Ways to Get Out of Debt in the UK
- Add article to Digg / del.icio.us /
Furl
- FREE online credit check
- FREE Instant Mortgage quote
Left unmonitored, debt tends to grow exponentially and, before you know it, demand letters are arriving from your bank, credit card and loan issuers. If you find yourself in debt it is not too late to fight back at any stage. However, it is very important to stay calm and be completely honest about the amount of money you owe.
1. If you currently have more than one debt, a good start is to put your debts in order of priority. If you are finding it difficult to pay your mortgage, rent or other living necessities such as gas and electric utilities then this should be given urgent attention. If your debts are due to loans, credit or store cards then list them in order of the highest interest rate first so you know which are costing you the most.
2. Draw up an accurate budget to allow you to easily see how much money you have left to spend on debt repayment at the end of each month. Writing down all of what you spend will also enable you to know where you can cut back or make sacrifices. This will help control future spending too.
3. Think about switching to a much cheaper credit card. Take advantage of one of the 0% interest balance transfer credit card offers to provide much needed breathing space on your repayments. Really you should stop using your credit card completely until the debt is completely cleared. However, if this simply isnt possible pick a credit card which also has a 0% introductory rate for purchases so that you are not adding to the existing problem. Please ensure you destroy your old credit card so you are not tempted to use it now that it is balance-free.
view the current UKs best credit cards
4. Destroy any spare credit cards or store cards to avoid their use and make sure you cancel your account with them. If you dont cancel the company will reissue the card when it expires and you will be sent a new one. That will only tempt you to use it again.
5. Make your repayments more quickly if possible. The faster you repay your debts, the less they will cost you in the long run. The minimum payment on your credit card may look like a great way out each month but if interest is growing, getting your finances straightened out will take a very long time. Be careful though if you are paying off a loan because their may be penalties if you try to pay it off early.
6. Consider moving your mortgage if you are on your lender's standard variable rate. The money you will save on your monthly payments doing this could help reduce more immediate debts. Switching your phone, gas or electric providers could also free up more cash. There are free online services that can save you money by changing energy supplier. You can also contact your mobile phone company who will advise you on cheaper tariffs.
7. Try to increase your earnings by taking extra employment if possible. Sell unwanted items within your home at a car boot sale, garage sale or on websites such as ebay.
8. Talk to your creditors as they will find it hard to be sympathetic if you ignore their letters and phone calls. Lenders are always dealing with requests for payments to be reduced and interest to be frozen so you may find they can actually help you.
9. Consider using debt consolidation and debt management companies if you really must. Sometimes it is better to just have one debt to manage rather than many.
10. Contact a free debt counselling service such as National Debtline or the Consumer Credit Counselling Service who will be more than happy to help.
| 
