Posts Tagged ‘credit cards’

Will my credit card company allow me to write off my debt?

Friday, October 16th, 2009

The short answer to this question, an issue that causes many people a great deal of stress and anxiety is “no” – it’s extremely unlikely. Credit card companies are not inclined to write off people’s debt.

One option available if you have debts on multiple high interest credit cards is to consolidate them on to one at the most competitive rate, even 0% if possible. This is perfectly achievable as a way of staunching the high interest payments.

A more serious option, and one that can be used as a more comprehensive debt management solution especially if you are in serious amount of debt and owe more than £15,000, is an IVA. An Individual Voluntary Arrangement is a legally binding agreement through which you are able to clear all your debts over a period of time (usually sixty months).

Your IVA provider will discuss with you how much you can afford in monthly repayments. The provider will then negotiate with your creditors to get them to write off part of your debts leaving an amount for you to pay off at the rate of the agreed monthly repayments.

Your creditors, including the credit card companies will of course have to first agree with your provider to write off the rest of your debts. As long as your provider presents a realistic repayment schedule it is likely that they will agree.

More serious still is bankruptcy, though this is regarded as a last option as there are a number of implications. You may lose your home, credit may be hard to come by in the future and you will even find yourself ineligible for some occupations.

The best advice as ever with debt matters is to seek independent and impartial advice, ideally from a non-profit debt resolution company who can offer you input specific to your individual circumstances.

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Posted in Bankruptcy, Debt advice, Debt management | 7 Comments »

Five Easy Steps to Clear Debt.

Wednesday, October 14th, 2009
  1. The first step is to recognise that you are in trouble; you have completed that as you are reading this blog. You are on your way to clear debt.
  2. Cut up your credit cards and store cards. This can be the hardest step for the majority of people as these cards are viewed as their safety net, but always remember this is probably what has got you in debt in the first place, be brave.
  3. Cut down on spending, work out what you need per day as a necessity, set yourself a daily budget and stick to it. Cut down on eating out, buying clothes etc. Avoid places that may encourage you to slip up.
  4. Inform your nearest and dearest of your situation, a problem shared is a problem halved, they should encourage you to keep on track, you are less likely to go back to your old ways if you are feeling watched.
  5. If you are in serious debt problems, you should get Debt Help; there are debt charities with professional advisers who can point you in the right direction to becoming debt free. There are different options available for you such as a debt consolidation loan, an IVA or maybe just support.

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Posted in Debt advice, Debt management | 2 Comments »

Five essential strategies for debt management

Thursday, October 8th, 2009

Getting into debt can happen for a whole variety of reasons: ill health, redundancy, relationship breakdowns, the list is endless. What’s important though is that you face up to the situation and acknowledge that the debt or debts are for real, that they won’t disappear of their own accord and need resolving. From this position of financial reality you can start to address the problems, deal with them and start to regain control over your finances.

Here are five essential strategies for debt management that will help you at least get to grips with the situation and offer you a chance of tacking it.

  1. Understand your debt.
    How much do you owe and to whom do you owe it? Take stock and list all you owe and where. Hard as it this might be, actualising what you owe will make tackling it much easier in the long run.
  2. Talk to your creditors and make manageable repayment arrangements. 
    Ask for improved terms as part of your debt management. You never know what you will be able to negotiate and even a small saving helps.
  3. Understand your outgoings.
    Make a note of everything you are committed to spending over a month. Use this information to identify where the money is earmarked. Once you identify what is essential you can cut out the non-essentials.
  4. Prioritise your debt.
    It’s likely some of your debt will be costing you more than other aspects of your debt – credit cards, for example, are one of the most expensive forms of debt. Identify the most expensive debt and deal with it as a priority.
  5. Cut up your credit cards and cut out the mindless spending.
    Credit cards are too tempting and too expensive. Yes a non credit card existence is less convenient, but convenience costs. You’re already in debt – don’t add to it.

Talk to an independent and impartial debt advice agency today, for more information on how to take back control of your finances.

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Posted in Debt management | 3 Comments »

Overdraft, Loan or Credit Card?

Wednesday, September 30th, 2009

The key when in need of cash up front is to take advantage of 0% APR on credit cards and overdrafts. Payday loans tend to be high interest, so often you’ll be paying much more than you’ve actually borrowed, which is not the way to go.

What I’d recommend is checking out Credit Card deals, where companies have 0% APR on new purchases and transfers which allows you to have cash up front without having to repay lots and lots. This is good so you pay back no more than what you have borrowed as long as you keep within the time schedule and purchasing limits.

The same goes for interest free overdrafts. It means that you can take money out from the bank and repay the same value to the bank without paying heaps of interest.

Avoid a payday loan unless you really need the money, as there are many other more sensible ways to go such as overdrafts and credit cards. Otherwise, you’d be in bigger financial trouble than if you hadn’t have paid your bills on time.

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Posted in Debt advice | 8 Comments »

Ways to avoid unnecessary debt

Tuesday, September 29th, 2009

Does debt have to be an accepted facet of contemporary living? For the majority, the sad answer appears to be yes. While this is a reality, there is no doubting the fact that a lot of debt is avoidable.

As consumers we each have unlimited wants and desire things that we don’t really need. It is a good idea to ask yourself if you really need what you are buying before parting with any cash. You may look at your car each day and feel that it would be nice to have a new one, but do you really need one? If it isn’t breaking down or covered in rust the chances are is that it is on your ‘wish list’ rather than a necessity. Most people haven’t got ten grand sitting in their bank account which means that they will need a loan. If you have bad credit you could easily end up paying 27% APR. If you are paying out £350 per month for a car you are buying today you have to remember that you will forego that money tomorrow.

Do you have credit cards? Many of these will be accruing interest at very high rates. If you are only paying the minimum amount each month you will find that your balance will not be paid off for 30 years. Why not take advantage of an interest-free credit card and transfer the balance across? If you keep doing this you will save yourself hundreds, if not thousands, of pounds. If you don’t have good credit, why not pay the debt off with your savings? If you are struggling to keep control of your finances the simple answer is to write to the credit card provider to close down the account or reduce the credit limit.

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Posted in Debt advice | 5 Comments »