Paying off debt can be an arduous task, especially if you’ve nothing tangible to show for all that spending (but hey, you’ve still got your holiday snaps!).
That white sandy beach and beautifully hot sunshine is now all but a distant memory. The Piña Colada, the pool, the picnics. How depressing. Even worse, all that you’re left with now is a huge holiday credit card debt that is threatening to rule out future holidays for the next four years (at least).
Here are our top tips for credit debt help when you’re still paying for a tan that faded long ago.
Time to take another look at your finances
One of the biggest steps forward you can take is to review your monthly expenses to identify opportunities to cut your costs and commit more funds towards slashing your holiday credit card debt.
Start with a two week period, over which time you’ll keep a note of everything you purchase (you could also use a budgeting app, such as Money Dashboard, Spendee or Cleo). After this time period take time out to truly understand what you’re spending your money on and where you can cut your cloth.
Always overpay on your credit cards
When attempting to tackle a large credit card bill, the odds aren’t in your favour. Most credit cards have significant APR rates of 15% upwards, while the low minimum repayments can stretch out the repayment pain over many years (on a balance of £1,800 which has an APR of 18%, the minimum payment would be £28 per month; at this rate it would take a staggering 19 years and 9 months to repay the debt!
Think about consolidating your credit card debt
If you’ve ran up multiple lines of credit and are really starting to feel the pinch, now may be the time to consider restructuring your finances and rolling all of them into a single monthly repayment.
This will prove an especially wise move if you have a reasonable credit score, as you may be approved for a personal loan (which tend to have far lower rates of interest when compared to overdrafts and credit cards).
Debt consolidation can also improve your credit score if, and only if, you use it wisely and don’t take out further credit after you’ve cleared your debts.
If debt consolidation isn’t an option consider a credit card balance transfer
Using a 0% balance transfer deal will help you tackle your debt, rather than simply servicing the interest.
Balance transfer credit cards won’t charge you any further interest for a set period (the exact amount of time differs from provider to provider). Don’t be tempted to simply allow the debt to sit on the card until the interest free period is up. Set up a direct debit of a fixed amount and stick to the schedule.
Sun, sea, sand and instalments!
Once you’ve repaid your holiday credit card debt, don’t be tempted to run up your limit all over again. For future holidays plan ahead and begin paying in instalments (you may just have to make it a cheap staycation this year).
We are National Debt Help. We’re here to help those struggling with credit card debt to finally claw their way out of financial trouble.
If debt consolidation isn’t an option and you’re struggling to afford the essentials – such as your next evening meal or your monthly mortgage, speak with our team about what your next step should be. Call us on 0800 002 9051 or send a message via our contact page.