SNIP UP THOSE CREDIT CARDS

Thursday, October 25, 2007

It takes just four minutes for Britain's personal debt total to increase by a million pounds .
Borrowing fever has gripped the nation and we now collectively owe around £1.4TRILLION!

Admittedly a lot of that is on mortgages but Brits have still built up around £53.4billion on credit cards. But relying on plastic to pay our way means being caught in a debt cycle with little way to escape.

As bills come in and suck up all our cash, it's too tempting to turn to credit cards and use them to pay for essentials.

But if you don't pay off the full amount at the end of the month, you will be hit by interest charges - which increase the amount of money you owe. And with interest rates rising, the debt can only grow - meaning it could take you a lifetime to pay it off.

If you want to avoid a long debt sentence, you need to take control of your finances. The first thing to do is cut up your plastic cards so you can no longer give in to temptation.
Then you have to pay off the debt so that high interest charges don't cripple your finances. If you can't pay it all off, set up a standing order to ensure you make a reasonable payment every month.

And make sure you pay more than the minimum or you will find that the interest charge outweighs the payment and the debt carries on growing.

Another option is to take out a personal loan to consolidate your debts. It can be a good way to get your finances under control.

And, rather than having to remember to make payments to several creditors, you can simply pay one company each month.

But there is a danger in personal loans. When the cash hits your account it's easy to fall into temptation and splash out again.

If you take out a loan to pay off your credit card debt, you should do exactly that. Also, remember you have to pay off any loan you arrange. Clearing your credit cards won't mean you'll be clear off debt.

You will still need to make strict monthly payments. So keep to a budget and you'll soon find your debt black hole diminishing.

Source: http://www.mirror.co.uk/news/topstories
/2007/10/25/mirror-finance-cut-down-your-debt-89520-20005310/