Online Finance Blog

Prior to the worldwide economic slowdown we were encouraged to use our credit cards as a source of easy flexible credit to help fund luxury purchases. This free spending culture is perhaps best epitomised by the slogan ‘whack it on the plastic’. However for many people this led them to build up large credit card balances on which they were only able to pay the minimum monthly repayment on. If you are in this situation you probably can’t see a way of ever reducing this debt. But with the following suggestions and professional advice a debt free future can be secured.

So how can you work your way towards a clear credit card? The first step is perhaps the most obvious- stop using the credit card. The more you spend, the more you have to pay back. With every purchase you are only digging yourself into a deeper hole. If necessary cut up the card to ensure you will not keep using it.

Next switch your balance over to a credit card that offers a better interest rate than your current card. This will help slow down the rising cost of your debt. Ideally you are looking for a card that offers a 0% interest rate for a selected period. During this time you will be better able to clear your credit as your won’t be accruing extra debt in interest.

If you have any savings it may be worth using these to pay off your credit card. There is no point saving money in one place and be obligated to a debt in another. Pay off that credit card and once you are debt free you can concentrate on saving again.

However if you don’t have any savings then the only way you will have a clear credit card is to pay off more than the monthly minimum. Even if it’s only a small amount extra each month it will help you to slowly reduce that debt. The best way to arrange this is to sit down and make a list of all the money coming in and all of your outgoings. How much do you have left once the bills have been paid and you’ve budgeted for food etc? This will give you a guide to how much you can afford to pay off on a monthly basis. To ensure you stick to this budget see if you can set up a direct debit to pay off the card.

It’s not always easy to clear your credit but with careful planning and a prudent approach to your spending you can soon bring your credit card balance under control.