A Guide to Repaying Your Credit CardA Guide to Repaying Your Credit Card
Many of us have a credit card and although most people will repay the full balance each month, there are some people that will leave some of the card unpaid. This is something which the card holder allows, but it does mean that you will be paying interest on the balance until it is repaid. It is therefore a good idea, to try to repay it if you can and there are some tips below on how to get started with this.
Stop Using the Card
It is a good idea to stop using the credit card until it is all paid off. This could be difficult if it is something that you rely on using, but if it is already maxed out then you may not be using it anyway. Try to find alternative ways to pay so that you are not adding to the problem that you have.
Make Sure Your Pay the Minimum
The next thing to ensure is that you are covering the minimum payment. You will be expected to repay a certain amount each month and you have additional charges and problems if you do not. If you have not already done so, set up a direct debit to pay this so that you never forget to do it. Hopefully this will be an amount that is small enough for you to be able to manage to pay.
Pay a Little Extra Each Month
If you can, try to pay a little more each month than you have to. Even if you just increase what you are paying by a few pounds to start with, it will mean that you are repaying a little bit more than the minimum and starting to repay some of what you owe. It might seem small, but it will make a difference and hopefully you will be able to increase this eventually anyway.
Consider Using a Loan
It can be worth considering whether it might be a good idea to take out a loan to repay the card. This may seem odd but a personal loan will often have a lower interest rate than a credit card and will therefore be cheaper than a credit card. However, you should only do this if you are confident that it will work for you. Firstly, you will need to check what the monthly repayments on the loan will be so that you can calculate whether you can afford it. Secondly, you will need to be sure that you will not start building up a debt on the credit card again, once it has been paid off. If you do, then you could end up with a card to pay off and a loan to pay off even with no guarantor and you do not want this to happen.
Spend Less so you can Repay More
You might also be able to find some ways that you can spend less money so that you will have more available to repay the card. For example, look at the things that you pay for and see whether you can get them cheaper. Items like insurance, electricity, broadband and mobiles can cost a lot of money and it could be possible to switch to a different supplier and save money or negotiate with your current one to save. It is worth having a go to see whether you can switch and save money. These are great ways to save money and they can save so much that you might be able to start paying significant chunks off the credit card as a result. If you switch to other cheaper things too you can spend even less and pay the card off even quicker.