Credit card debt overflow? Tips on how best to pay it off

By Charlotte Yau

Credit card debt can feel overwhelming at times so here are our top tips for paying off credit card debt. 

At times in life you may find that you have taken on too much credit card debt. Your outgoings may have changed, or you may find that you've borrowed more than you can now comfortably pay back. Burying your head in the sand, or attempting to apply for further credit, is only going to cause further problems down the line financially and also to your credit score. Here are some steps to take to pay off your credit card debts:

Contact your creditors

Avoiding dealing with your debts is the wrong approach. Often there are late payment fees and interest charges that can snowball and increase your debt drastically. Credit card companies have procedures that can be put into place to help you with repayments. If you are considering taking out a 0% balance transfer card to combine your debts into one card, here's a handy article. Some companies will be willing to freeze interest, after going through your incomings and outgoings, and others may allow you to make smaller repayments. 

Create a budget

The first step to creating an efficient budget is to begin with recording your income and outgoings. Be sure to include all outgoings including takeaways you purchase, essentials such as clothing for work, tickets for public transport and debt commitments. A great way to work on your budget, and see where you can cut back, is by looking through your bank statement for the previous 3 months. This will help you to build an accurate picture of where you may be wasting money and what areas you can cut back on.

Work on increasing your income

Increasing your income is one of the best ways to work on paying off credit card debt. While it isn't always easy to find a second job, or even a main job, a part-time job, in the evenings or on weekends, can be a fantastic way to increase your income. If you do not have the time to commit to a second job permanently you could look at alternative ways to increase your income. Other ideas include selling unwanted items on auction websites, delivering food for a local takeaway or utilising a skill you may already have. If you are handy with a paintbrush or can bake cakes then this could be alternative source of income worth exploring further.

Be organised and create a plan

Organisation can be one of the influencing factors when it comes to planning your financial future. It can take willpower to avoid ordering takeaways and organisation will help you with planning your outgoings for the future. Make a list of the steps that you are going to take to reduce your outgoings and/or increase your incomings and remind yourself of these steps regularly. Keep track of any over payments that you make to remind yourself of what you are achieving with your hard work.

Consider debt consolidation

Debt consolidation should be considered as an alternative way to deal with credit card debt. If you have the option to consolidate all of your credit card debt into one payment, whether via loan from a relative or a personal loan, this could save you interest charges. Debt consolidation may allow you to reduce your monthly repayments. Another debt consolidation option to consider is a debt management plan. If you are seriously struggling to make repayments or you are already behind then a debt management plan can help you avoid bankruptcy. There are free companies to help you with a DMP such as StepChange and PayPlan. These companies will provide you with advice, work out your best options and help with spreading your debt repayment across your multiple creditors.

Top Takeaway

Stay calm and remember that you are working on improving your situation. Attempting to ignore your problems will not make them go away in the long term and may increase your debt overall.

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