Personal debt is on the rise and debt help is needed by many people who have used credit cards and store cards to take the strain. Literally millions of people are affected.
Plastic is just a short-term solution and misuse of credit cards only adds to debt problems. If you are not careful, insolvency and bankruptcy appear on the horizon.
However, there are simple steps you can take to make sure that it never gets to that stage. The best way to ensure your debt doesn’t get out of control is to stay out of debt altogether. So here is a debt help guide to staying out of the red.
Number one on your list should be to economise.
List all your outgoings over a month. You have to be completely honest with yourself and include everything. Compare and contrast the total with that of your income. If there’s more in the outgoings column, then you have to make cutbacks.
Eradicate any unnecessary expenditure until you are spending less than you are earning. You then have a budget to work with.
But you have to stick to that budget religiously. Don't kid yourself that you can overspend then make up for it the next month. It won't work out and that way you will get into bad habits and increasing debt.
When it comes to credit cards, can you really trust yourself? Have you overspent on credit cards in the past? If so, maybe you should just say no to those offers coming through the mail. It might save you a lot of pain in the long run.
However, if you do decide you can use a credit card sensibly, you should stick to a few rules just to make sure.
The most sensible way to use a credit card is to pay off the balance every month – that way you minimise the cost by avoiding excessive interest.
Don't fool yourself into believing you can manage your credit cards by paying only the minimum amount every month. You will never clear your debt this way.
But it might not always be possible to pay off the balance every month and sometimes you need to use a credit card to help ease the blow of necessary expenditure.
So it is important to get the best interest rate you can. Shop around and choose carefully. Be prepared to look beyond the bigger names as they don't necessarily offer the best deals.
There are cards that offer low introductory interest rates, sometimes 0% for a limited time, and you can take advantage of these. You should be prepared to switch cards regularly to get better interest rates and benefit from more introductory offers when the old ones run out.
Stay away from store cards as the interest rates these carry are usually way in excess of normal credit cards.
Most importantly, resist temptation. Don't spend what you can't afford and don't borrow to buy luxury items. If you want something badly, save for it.
Obvioulsy, this is all easier said than done. So if you do run into problems, acknowledge the situation as soon as you can instead of going into denial and seek professional debt help. A good debt counsellor will offer free, confidential advice so it needn't add to your expenses.
John Porter is a professional debt counsellor, providing free debt advice, and has worked in the debt help industry for more than 20 years. He is a senior counsellor with The Debt Counsellors. For more information see http://www.debtcounsellors.co.uk/
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