Pay­ing af­ter the hol­i­day is over

The Weekly Advertiser Horsham - - News -

The hol­i­days are over and you have had a great time. The dreaded credit card state­ment has ar­rived and you won­der how you’re go­ing to pay it off. Happy hol­i­day mem­o­ries van­ish into thin air.

Un­for­tu­nately, there are no magic ways to wipe out debts – it just takes dis­ci­pline.

Pay­ing off credit card debt quickly re­quires more than pay­ing off the min­i­mum each month.

Most credit card providers re­quire you to re­pay about two per­cent of the bal­ance each month, although they are re­quired to out­line how much more you will pay if only the min­i­mum is paid.

With in­ter­est rates av­er­ag­ing about 17 per­cent per an­num, most of your pay­ment will re­duce a por­tion of the in­ter­est with only a small amount ap­plied to the debt. It will take lit­er­ally years to pay it off.

Quite sim­ply, you must pay more than the min­i­mum. Fol­low­ing are some ideas to help you do that.

Hide it be­fore you spend it

Ar­range for an au­to­matic trans­fer from your pay to a sep­a­rate ac­count so you never see the money.

Use that ac­count to pay off the debt/s. Al­ter­na­tively, sched­ule an au­to­matic de­duc­tion from your cash ac­count to your credit card ev­ery pay day. If the money isn’t there, you can’t spend it.

Save the lit­tle bits

Put all the coins you get in change into a sav­ings jar, prefer­ably one you can’t open like the piggy bank of your child­hood.

You’ll be sur­prised how quickly it adds up and ev­ery time you add to your pot you’ll be re­minded of your goal.

When it’s full, at­tribute the en­tire con­tents to your debt.

Sell some­thing

Ev­ery­one has stuff that is no longer needed – for­got­ten gym equip­ment, a bi­cy­cle gath­er­ing dust, an un­used mu­si­cal in­stru­ment, and so on.

Sell it on­line or have a big clean out and stage a garage sale.

Spend less

Care­ful spend­ing doesn’t need to im­pact on your life­style. Try these ideas: Check the su­per­mar­ket cat­a­logues and buy the brands on spe­cial; cook at home rather than eat at res­tau­rants or buy­ing take-away; lay-by birth­day and Christ­mas gifts dur­ing the new year store sales, bet­ter still, give the gift of spe­cial time to­gether at Christ­mas rather than buy­ing lav­ish gifts; check out up­mar­ket clothes re­cy­cling stores.

Use wind­falls

Ev­ery now and then a chunk of money comes your way – back-pay, a bonus or a tax re­fund. It’s al­right to give your­self a treat, but put most of it to­wards your debt.

Ask for help

If all else fails, talk to your credit card provider about other ways to pay off the debt.

They want to be re­paid and might be pre­pared to make spe­cial ar­range­ments for you.

Then when your next hol­i­day swings around, your credit card will be squeaky clean, ready for you to have fun with­out any debt guilt.

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