Many of us have credit card debt and it can become a worry if we feel that it is building up and we are not doing enough to repay it. It can feel like an uphill battle, but there are ways that you can make repaying it easier. It is worth having a step by step or methodical approach so that you can follow it through.
- Stop using your card – the best way to start is to stop using your credit card completely. Then you will not be able to add to the debt that has already accumulated. It is not easy to do this but if you put it somewhere where it is not easily accessible that could help. You may feel that if you are making online purchases then it is not safe to not use your card. This is completely understandable but try hard to avoid making those purchases at all and then you will have no reason to use the card. If you do end up using it, do not use it as an excuse to use it a lot more. Just put it back away and try to not use it and also do not punish yourself for slipping up just once, just learn from it and try to avoid it in the future.
- Ensure you repay the minimum by direct debit – All credit card users are required to repay the minimum each month. This will cover the costs of the card and not doing this will result in even bigger fees and charges. Therefore, make sure that you are always able to do this. The best way is to make sure that you set up a direct debit for the amount and have it leaving your account just after you get paid. If you do not have one set up at the moment then contact your card issuer to arrange it. If the date the money goes out is not ideal then contact them. It is very likely that they will be happy to change it for you.
- Pay a little more than the minimum – Once you are on track with not using the card and paying the minimum it is worth thinking about whether you can pay off a bit extra. It might eb that you will only be able to spare a few pounds extra, but anything extra will help to repay the card more quickly. It can be best to work out how much you can afford by looking back over past bank statements and seeing whether you tend to have money left over each month that you could be using to pay off the card. Even if it is just a small bit then it will start to add up and make a difference. Then you can adjust your direct debit so that it is a bit higher. It can be confusing form the statements as it may look like you can only either repay the full balance or the minimum, but it is acceptable to set up a direct debit for any amount you wish as long as it is the minimum amount or more.
- Pay off chunks when you can afford it – you might also find that some months you are better off than others. This might be because you have less bills, have a bit more money coming in or something else. If you have a bit of spare money then use it to pay off a chunk of the credit card. Many people do not realise that you can pay off chunks of the card whenever you like. You do not have to just repay at the set time in the month when you have agreed to.
- Cut spending elsewhere to free up money – If you want to make a more significant impact on your credit card balance then you will need to reduce the amount that you are spending elsewhere so that you free up extra money that you can use to pay off more of the debt. This can be tricky but it is worth thinking hard about everything that you buy and considering whether you really need it right now. For example, when you are buying things always question whether you need it or whether you can wait until the card is repaid. Also think about whether you can pay less for the things that you are buying. Compare prices on everything that you buy and you may be able to spend less quite easily and use that money to pay off the debt.
As you pay off more and more of the debt your interest charges will go down. You will be able to use that money to repay the debt more quickly. This means that although it might seem very tricky to start with, you will find that it will get easier and easier as you whittle away more and more debt.