Christmas is always an expensive time and whilst retail outlets smile with all the spending, the number of Brits who put Christmas costs on their credit card is enormous. If you’re one, make sure you clear that credit card debt in the smartest possible way.
As moneysupermarket.com points out, whilst for many credit card holders the usual route for dealing with their Christmas credit card debt is to transfer it to a new 0% balance transfer card, this is no longer as easy an option as perhaps it once was.
The best approach for you to take to clear your debt will depend on your credit rating and how much you can afford to repay of your debt each month.
Fewer credit card providers are offering 0% balance transfer cards and even those that do offer them are very selective about issuing them – less than half of such applications are accepted.
Dealing with your debt now, not only might help you get a great deal on a credit card now but also might help you keep it and if need be get one in another year’s time.
So, here are some top tips from moneysupermarket.com, fully supported by us here at MoneyHighStreet.com, to help you as you consider switching your credit cards and clear your credit card debt in the smartest way:
1. Check your credit rating – the better your credit rating the more chance you have of being accepted for a credit card, albeit this is no guarantee. You can get a Free credit report as a starting point.
2. Plan and budget for repaying your debts – set yourself a realistic monthly payment and stick to it. If you do transfer your debt to a 0% balance transfer credit card deal, make sure you try and pay off the balance before the transfer period ends
3. Consider a low rate credit card – if you can’t pay your debt off in the 0% balance transfer time, consider a low rate credit card
4. Check whether you can transfer your balance to a new provider – Many providers prohibit the transfer of existing debt to other cards within the group. For example cardholders cannot transfer a balance from a Sainsbury’s credit card to a another HBOS issued card, or Virgin credit card balances to another card issued by MBNA.
5. Check your credit limit – if you do get accepted for a new credit card, be aware you may not be able to transfer all your existing balance across as your credit limit may have been set lower. If this is the case, then transfer as much as you can to it and focus on paying off the remaining balance on your old card as quickly as possible.
6. Consider a personal loan – if you cannot get a new credit card deal, consider a personal loan which will allow you to make fixed repayments over a set period of time which will help you budget.
7. Pay your debt off as quickly as you can – If you cannot move your debt anywhere, focus on paying it off as quickly as you can.
If you are facing wider debt issues though, don’t leave it too long before you consider getting some professional debt advice – taking action sooner rather than later could really help you enormously.