Thousands of Scottish residents are currently struggling with credit card debt. It can be all too easy to quickly accumulate huge amounts of debt due to high interest rates and hefty charges. Dealing with your credit card debt is not an easy challenge to face. However, there are a few ways you can reduce your credit card debt before you consider the best way to resolve your other unpaid debts.
Add up the debt
The time has come to face the music when it comes to your credit card debt. It can be very easy to stick your head in the sand and ignore the spiralling costs. However, having a good overview of your debt will help you to make a realistic timeline for getting out of it. You may feel uncomfortable seeing the entire total of your debt in front of you, but it will also provide invaluable motivation to reduce it as much as possible. You should also record the interest rate of each chunk of debt too, as well as keep records of balance transfers, cash advances, special offers and multiple balances at different interest rates.
Stop using the cards
Avoiding your credit cards is sometimes harder than it seems. This is a necessary step if you have any hope of reducing your debt as the more you spend, the more your debt will worsen. You should cancel any bills that are paid directly from your credit card and choose to pay online or by post instead. Alternatively you can pay in cash at the appropriate pay points. The most important thing to remember is that getting out of debt is more important than accumulating any air miles or reward points that your credit card company may be offering. Write down the information of your credit cards such as the account numbers, how your name appears on the card, expiration dates and security codes – keep this information in a safe place while you either cut up your cards or store them in a place that you cannot access. It’s recommended to keep one card in case of a real emergency.
Contact your creditor
There is no harm in contacting your creditor to request for a reduction in the interest rate you are paying. Any small reduction may help to alleviate some of the financial pressure. The worst the creditor can do is say no to your request. If you do ask for a reduction in the interest rates, be aware of balance transfer fees. If you don’t pay off the entire balance by the time the special interest rate expires, you may be subject to even higher interest rates.
Calculate available income
If your income varies from month to month, you should base your calculations on the minimum amount of money you are making per month. From here you will be able to draw up a budget of all the predicted expenses in the coming months. You should take into account fixed expenses such as rent, utilities and groceries but also insurance payments and any medical bills. You should add the minimum credit card payments as part of the expenses you are expected to pay. You should grant yourself a small allowance for extra spending. This allowance will help to prevent uncontrollable splurging. Any remaining funds should go towards paying off your credit card.
Identify your highest interest rate debt
You should put as much spare money as possible towards the highest interest rate debt that you have. You may find that you have a little left over each month that can go towards eliminating the expensive interest rates. You may even be able to find extra sources of income in your home, such as selling your old clothes, electronics or any other unwanted goods online or through a consignment shop. Any extra funds that you have available to pay off the highest interest rate will alleviate much of the financial pressure and will help you to tackle your credit card debt one card at a time.
There is much you can do to reduce your credit card debt, however eliminating your debt completely can seem virtually impossible. If you are struggling with credit card debt and you see no way of making the repayments, talk to Trust Deed Scotland. It may be time that you invest in a protected Scottish trust deed that will help you to make manageable repayments over a set period. Contact us today for more information.