There are a few things you can do to start working your way out of debt. The first thing to do, however, is to take stock of your situation and face it head-on. You need to be completely honest and accurate about how much you owe. Take the time to sit down and add up all of your debts, as well as noting down how much you have already paid off and how much you are currently making in monthly payments. You should also make a note of your monthly income, and weigh this against your debts.
Now that you have an accurate picture of your financial situation, you can start looking for ways to get out of debt. The following tips and tricks could help you, but you must make sure they apply to your present situation.
Move your balance to a cheaper credit card
If you have credit card debt and you can’t afford to clear your balance each month, you may be paying a small fortune in interest. This only adds to your debt. By putting in a new credit card application and moving the debt off one high interest card to a balance transfer card with a 0% APR offer for the first year, you will give yourself time to clear the debt without having to pay any unnecessary interest. You should try to clear your balance before the introductory period ends, or switch again to another card with an introductory offer if you can’t clear it.
Reclaim unfair bank and credit card charges
If any of your debt is made up of bank or credit card charges, which have been incurred because you went beyond your limit, you may be able to reclaim them. All you need to do is apply to your bank and be persistent in pursuing the matter. The bank or credit card provider may not pay out, but it is worth a try if it can ease your debt problems.
Use savings to pay off debt
This is an easy one – the interest you receive on savings is usually less than the interest you are charged on things like credit cards and loans, so it makes sense to use savings to pay off your debts.
Check if you can get help paying your debts
If you need help paying your mortgage, there are some government schemes which may be able to help out if you prove to be eligible for them. Similarly, some utility companies offer schemes to help out customers who are in large arrears. It is worth checking these out, as they could reduce your debt burden considerably.
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