HOW TO SHED THOSE £000’s AFTER CHRISTMAS

 

 

Today I have a fantastic post from George who runs the blog Retired Broker.  You can follow George here.  George shares his ideas of how to shed those pounds from your credit card bill.

 

The January credit card statement is the financial equivalent of standing on the scales on Boxing Day;  you know the numbers you are looking at are accurate, but the events that led to this point don’t  seem such a great idea any more.

 

So what are your options when faced with the aftermath of a little festive overspending? Well there are options, but like the battle with the scales, success relies on a bit of planning, effort and will-power.

 

As with any credit card bill, the absolutely best solution is to clear it in one go, It avoids interest charges and does wonderful things for your credit score.

 

If that is not possible, you are then facing the prospect of paying interest probably in excess of 15% APR. If you took advantage of a special offer on a store card in order to buy that must have present that was otherwise just financially out of reach, then you are facing higher charges as these cards generally have interest rates of 20% APR and even over 30%! These can wipe out any “special offer” if not used wisely.

 

If you have a balance of £1000 with an interest charge of 18% APR and are paying £30 a month to clear it IT WILL TAKE YOU JUST UNDER 4 YEARS AT A TOTAL COST OF £1410!

 

If you can’t clear your bill in one hit, then the first thing to do is make a realistic assessment of the situation. This is quite simple; however it only works if you are completely honest with yourself!

 

Here are a few steps you can take that will help you get back into control:

 

Step 1.

Write down the total amount of the credit card bill. If there is more than one, then list them separately.

 

Step 2.

Read the terms and conditions of each card. You need to know the interest rate you are being charged and the length of time you have to pay it. If you have more than one card, list them in order of who is charging the most interest first.

 

Step 3

Work out a budget for yourself. Include everything you spend and include an amount for day to day expenses. Work out an amount that you can comfortably afford each month to pay the outstanding amount.

 

It may be that you find that the balance can be cleared in a few months and you are happy to accept the interest charges for those few months. On the other hand, it may be that it will take a while longer.

 

One way of dealing with this situation is to look at other credit cards and see if you could be better off switching and taking advantage of an interest free offer. Also known as a “Balance Transfer”, this is where you move your existing credit card debt to a new card in order to take advantage of an interest free period over a set time.

 

The advantage being that if you are no longer paying any interest, the whole of your monthly payment is set against the outstanding balance, resulting in the debt being reduced (and hopefully finished) a lot quicker. There is usually a bit of a catch though.

 

The new provider commonly adds a transfer fee, typically 3%, to the balance that is being transferred. You need to check this carefully when looking at your switching options. It has to be said though, that even with the fee, you are virtually guaranteed to save considerable amounts by switching to an interest free card.

 

Other things to consider are the interest rates the new card will charge when the interest free period ends and whether or not the interest free offer is just for balance transfers or will it be for purchases as well.

 

The safest way to use these cards is to make the transfer, work out how much you need to pay in order to clear the balance by the end of the interest free term and never use it again!

 

GOING BACK TO THE EARLIER EXAMPLE OF A BALANCE OF £1000, IF IT IS SWITCHED TO AN

INTEREST FREE CARD, EVEN WITH A 3% FEE, IT WILL NOW TAKE UNDER 3 YEARS TO CLEAR, AT A

TOTAL COST OF £1030. A SAVING OF ONE YEAR AND NEARLY £400!

 

There are a variety of credit card comparison sites on the internet that will help you choose the best one for you, but bear in mind that in order to qualify for the best offers, you need a good credit record.

 

WANT TO KNOW WAYS TO INCREASE YOUR BANK BALANCE THIS JANUARY?  CHECK OUT MY BLOG POST HERE.

HOW TO SET UP A BLOG TO MAKE MONEY IN 3 EASY STEPS?  VIEW THE POST HERE.

INTERESTED IN KNOWING HOW TO MONETIZE YOUR BLOG?  READ MY BLOG POST HERE.

WANT STUFF FOR FREE TO REVIEW ON YOUR BLOG?  READ MY POST HERE.

WANT TO MAKE MONEY WITH YOUR OLD RECEIPTS?  READ ALL ABOUT IT HERE.

WANT TO EARN GIFT VOUCHERS?  READ MY REVIEW OF SWAGBUCKS.  

INTERESTED IN KNOWING WHAT A VIRTUAL ASSISTANT DOES AND HOW YOU CAN MAKE MONEY?  READ MORE HERE.  

WANT TO GET PAID FOR COMPLETING SURVEYS?  READ MY POST ABOUT PROLIFIC ACADEMIC HERE.

PIN THIS POST FOR LATER

how-to-shed-those-000s-after-christmas

 

Sharing is Caring...
Save Money
Previous Story
Next Story

You Might Also Like

2 Comments

  • Reply
    Victoria Sully (Lylia Rose)
    January 2, 2017 at 7:59 pm

    The best way to do it if you need credit, is to get a 0% credit card for Christmas shopping with at least a year to pay it back interest free, then you don’t have to pay any interest and just pay for what you’ve spent 🙂

    • Reply
      admin
      January 3, 2017 at 7:30 pm

      A fantastic idea indeed. There are so many great 0% offers out there at the moment. Thanks for sharing Victoria 🙂

    Leave a Reply

    Social media & sharing icons powered by UltimatelySocial