How to Get Out of Credit Card Debt in 4 Steps by Jim Kendall

How to get out of credit card debt. These steps are for people who feel as though their credit cards have trapped them into debt and they do not know where to begin taking back control.



1. Take Out The Scissors



This first step may fill you with dread, but take every single one of your credit cards and cut them up into small pieces; this first step alone will make it hard for you to continue spending money on your credit cards.



2. Dealing With The Debt



How you deal with the debt depends on your circumstances. If you’re seriously in debt and are struggling to pay your important bills such as your mortgage or rent then you need to make sure you are paying your priority bills first so that you do not lose your home, if this is the case it is advisable to seek help from a debt advisor who can give you support on the best way to manage and deal with your debts.



If you find that after completing your budget you have some spare cash available then it’s time to begin paying off the credit cards.



3. What Do You Owe?



Go through each of your recent credit card statements and write down the details for each card, make a note of its outstanding balance and the rate of interest being charged.



Eg:

Virgin - £970 – 16.6%

Capital One - £2400 – 34.9%

Barclaycard Initial £500 – 27.9%



4. What To Pay?



Now that you have your list of credit cards and monies owed, you can now begin the process of paying off the debts. We are going to focus on paying off the cards one at a time. First of all make the minimum payments on all of your cards except for the one with the highest rate of interest, so in the example above the first card we will begin paying off is the Capital One card.



This is where you need to be really ruthless and make some cutbacks on your spending habits, for instance do you really need to go to the takeaway this week? Any extra cash you can find to go towards paying off your credit cards means that you will be paying less interest on the cards and giving away less of your money to the credit card companies.



Continue paying off the first card until it is fully paid off, you can now cancel your account with the credit card company, and this will be a very satisfying experience!



The next step is to find the next card with the highest interest rate, in the example above this will be the Barclaycard Initial. Now begin paying off this card exactly as you did with the first card and continue to make the minimum payments on the rest of your cards.



If you continue this process through all of your cards you will wipe out all of your credit card debt and save the most money possible on your card debts.



5. Congratulations



Congratulations you have now dealt with your credit card debt and your money worries are now over. These steps require some willpower and determination, so do not give in when “ you must really buy that item of clothing” the feeling of no more stress and satisfaction that you will get after clearing your credit card debts will be worth 10 times more than “that special item of clothing”.


If you have problems with debt you can speak to one of our UK debt advisors with a 100% free consultation who can also provide IVA information which can write off up to 70% of your debts.


Article Source: How to Get Out of Credit Card Debt in 4 Steps

Which Debts To Pay First ? by Jim Kendall

In this article we help you to decide which debts to pay off first. Do you find yourself inundated with scary debt letters and phone calls and each of those companies insist on you paying their debts first? In most cases this is exactly what you should not do.



Quite often the companies that do not use aggressive tactics such as phone calls and letters are usually the most important debts that you need to pay first, examples of this are your rent / mortgage.



If you begin experiencing problems paying your debts, contact your creditors immediately and tell them that you are currently having problems, they prefer to be kept in the picture and should be able to work out an arrangement if you contact them early enough.



Here is a list of the debts / bills which you should aim to pay first over your other debts:



* Tax (council)

* Hire purchase

* Electricity / gas

* Maintenance and child support

* Fines

* Income tax

* Rent / mortgage

* Second mortgage

* Television licence



if you do not keep up payments on these kind of debts it could have serious consequences such as losing your home, disconnecting electricity / gas, losing your car etc. Whereas not paying a credit card debt immediately will not have any serious consequences, however you can still be taken to court and ordered to pay what you owe.



An example of non-priority debts are:



* Credit cards / store cards

* Bank loans and overdrafts

* Family loans



Your first step however is to contact your priority creditors as soon as you realise you are having difficulty paying your debts, you can then try to agree on an affordable payment arrangement with them. It is also worth seeking advice as your debt advisor may do this on your behalf.



Once you have organised your priority debts, you still need to deal with the non-priority debts. Once you have arranged payments to your priority creditors, your non-priority creditors will wish to receive a fair share of any money left over. A debt advisor will help you to work this out and can even negotiate this for you with your various creditors it is also important to ask for interest and charges to be frozen, again a debt advisor can negotiate this on your behalf.



The most important step that you can take is not to bury your head in the sand and contact your creditors as soon as you start having repayment problems. If you receive a court summons make sure you get advice immediately as you will be required in court to demonstrate that you can afford to pay your debts and clear the arrears within a reasonable amount of time.


If you have problems with debt you can speak to one of our UK debt advisors with a 100% free consultation who can also provide IVA information which can write off up to 70% of your debts.


Article Source: Which Debts To Pay First ?