Tag Archives: credit card debt

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Tips on How to Manage Your Finances and Stay Debt Free

Being in debt can at times feel like a hopeless situation. You seem to try too much to put the situation under control but simply never get it right. As if that’s not enough, you are always on the edge, constantly wondering and always anxious that the next call could be from your creditor asking you about repayment. However, if you are keen on staying out of the red line, there is no other way other than to effectively manage your finances. The dilemma is in the fact that not everyone is a financial guru and therefore financial management is more or less an alien phenomenon to many ordinary folks in the UK or any other part of the world. It is for this reason that this article has been penned to enlighten you on a number of tips you can utilize to effectively manage your finances and stay debt free.
Budget
The only way you can stay on top of your spending is if you budget on how you are going to spend the money you have. As a rule, never spend more than you earn or spend the money you don’t have. Budgeting entails planning for your money and understanding how each penny will be used. It’s a good way to avoid impulse spending and ensures that you don’t spend on unnecessary things.
Put a leash on the use of credit cards
Truth be told, credit cards have a way of getting you into debt as you are spending cash you don’t have. Most of the time, you find yourself charging for virtually everything without pausing to comprehend the impact it will have on your finances. It is therefore prudent that you avoid using credit cards or if you must use, charge amounts you can comfortably pay at the end of the month. The wise thing to do would be to shop using hard cash as you will feel the pinch as opposed to the use of credit cards. Credit cards tend to make people spend more than what they would if they were using crisp cash.


Cut down on unnecessary expenses
It is easy to be sucked into partying every other weekend or eating in posh restaurants every once in a while. While this is laudable if you have sufficient disposable income, prudent management of your finances requires that you check your expenses. Only spend your money on what is necessary and avoid unnecessary expenditure which could seriously hurt your finances and put you into debt. Additionally, rather eating at the restaurant every single day, you could make food at home and carry it to work for lunch. It could save you a great amount of money and help you stay out of debt.
Apply for low interest rate credit card
It is highly not advised to rely on credit cards for every purchase. However, if you must use a credit card, then ensure that you apply for low interest rate credit cards. The logic is pretty simple. The lower the interest rate you pay on a credit card, the more money you get to save.

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How to Reduce Credit Card Debt

The reason that many people find themselves stuck deep in debt is because they fail to admit that they have a problem. The first step towards being debt free is admitting that your debt is no longer manageable and a problem that needs help. Unfortunately, most people are egotistical and suffer in silence while there debt continues to rise. A lot of people in the UK find themselves with high credit card debt as a result of unchecked spending. A few admit the problem and seek for assistance from relevant institutions while others are adamant and suffer in silence.

If you find yourself steeped in credit card debt, the first thing you need to do is admit that it’s a problem and that you need professional help. There is no shame in admitting that you cannot effectively service your credit card debt and need professional help. Staying in denial just to save face will definitely make your situation worse; wondrously affect your credit score while at the same time affecting your personal life.

If you find yourself in huge credit card debt, the first course of action should be to admit to your credit card company and negotiate with them how you are going to settle your debt. Ordinarily, creditors impose or charge unnecessary penalties when you are unable to meet your financial obligations. To avert such a scenario and to stem your credit card from skyrocketing, the wise thing to do is to approach your creditor and prepare a plan on how you are going to make the repayment. However, since you are probably not versed in financial and debt negotiations, the best course of action would be to hire the services of a debt settlement company or professional.

Such professionals have intensive knowledge not to forget the prerequisite experience to negotiate a better debt settlement on your behalf. Such debt settlement companies are bound by law to work in your best interests while at the same time ensuring that the settlement they arrive at with your creditors reduces pressure on you and is good enough to enable you pay in a lump sum according to the agreement reached.

Another way you can effectively reduce your credit card debt is if you consolidate your debts. At times, you are dealing with a number of debts at a go and simply can’t find the right mix or don’t have the required finances to make payments for your debts as initially agreed. A debt consolidation company can consolidate all your debts including your credit card debt into one single debt. The greatest advantage is that instead of dealing with different creditors, you will be paying a certain amount of money to your debt consolidator every month depending on the new agreement you have with them.

This not only reduces stress for you but also gives you peace of mind as you won’t be dealing with calls and imposed penalties from different creditors but rather deal with one organization in repaying your debt. That notwithstanding, in order to stem high credit card debt, it’s advisable to use your credit card prudently!