ARE you still nursing a debt hangover from Christmas?
There are some steps you can take to shift it — and it pays to be proactive.
We talk to Rachel Springall, from moneyfacts.co.uk, for her tips on what you can do . . .
TAKE A TRANSFER: Move existing debts to a zero per cent balance-transfer card. You can get a huge 35 months interest-free with Virgin Money. This will give you lots of breathing space to clear what you owe. Watch out for a transfer fee of 2.94 per cent though. Shift £3,000, and it would cost you £88.20. But avoid this cost with a fee-free balance transfer deal. NatWest has a card that offers 22 months at zero per cent.
PLAY YOUR CARDS RIGHT: Always be disciplined about making the minimum monthly payment on a balance-transfer card. And pay off more if you can. Clear debt or shift it again before the zero per cent ends, or costs could rocket.
CLEAR YOUR OVERDRAFT: Being overdrawn is a debt you can’t ignore, especially with many accounts charging more than 30 per cent interest. Prioritise paying off what you owe. Cheaper options include Starling Bank with a lower overdraft rate of 15 per cent. Or, First Direct has a £250 interest-free overdraft, plus £130 “switching bonus” for moving your current account.
DRAW UP A BUDGET: Avoid relying on credit cards and other forms of borrowing by working out a manageable monthly budget and seeing where you can make savings. With the cost of living on the up, it’s a good idea to start scrutinising outgoings. Check out budgeting tools such as moneyhelper.org.uk/en/everyday-money/budgeting/budget-planner.
BACK TO BASICS: Consider a basic bank account where an overdraft is non-existent, such as the Virgin Money Essential. You won’t stray into the red.
lPrices correct at time of going to press. Deals and offers subject to availability.
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- Prices correct at time of going to press. Deals and offers subject to availability.
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