Debt Advice Tips

By FinanceGuru • Mar 7th, 2009 • Category: Debt

Whilst listening to a recent radio debate on personal debt in Australia I was struck by how many of the people calling in were so amazed that they had ?suddenly? discovered they were unable to keep up with their monthly payments. One caller even said the following ?we were just spending and spending and had no idea how much we owed?. This sentence struck me as incredible. How could you not know how much you owe? The woman in question was considering bankruptcy despite having never missed a monthly payment, she had no idea she owed over $50,000 and was actually technically insolvent. The aim of this post is to give some tips in helping you stop those credit card debts from getting beyo

1, Using credit to pay credit.

It?s easy for debt to ?snowball?. Rather using your wage you instead use other cards to pay other cards. The result is one goes down (as long as you don?t spend on it) and one goes up. Short term you are not going to be directly be paying your card in that it will not be coming out of your wages. However, this means your overall debt level will simply continue to grow. Long-term this is a sure fire way of crippling yourself financially. Take stock now and stop obtaining further credit!

2, Missing payments.

This may sound obvious but some people simply shrug this off as being ?one of those things? or claim they will pay ?double next month?. Wrong. Missing payments not only means your credit rating will suffer but you will incur late fees and any other fees your credit company decides to add on. If you can?t afford to make your monthly payments to your creditors considered talking to them and explaining why you are able to pay the contractual amount.

3, Cut back on pointless card purchases.

Try not to pay for everyday items on credit cards such as groceries and petrol. ?Little? purchases all add up and if you are paying interest on them what really is the point?

4, Falling for ?interest free? offers.

If you have more than one card you might think that balance transfers from one card to another are a great idea. You may not pay any interest for six months which is great. However, the temptation is now there to spend on your old card which no longer has a balance. Now six months comes along. You?ve got two cards with large balances and there?s another interest free offer?.STOP.

5, Debt Consolidation Loans

Easy. One loan to pay off all your cards. You take the loan, it cuts your payments down and everything?s fine. However, unless you have cancelled all your cards or cut them all up you may be tempted to spend on them again. If you do spend on them again (thousands of people do) you will find your debt levels doubling at an alarming rate.

6, Payment protection and other insurances!

No, I?m not saying ?cancel your payment protection? but?do you really need it? For example you may have been sold your insurance on with a line like ?how will you pay your cards if you lose your job??. A valid point. However, what do you do for a living? If you a taxi driver working in Sydney and your firm closes down is it really going to take that long to find alternative employment? Likewise, how much time have you had off due to sickness? Does your company pay sick leave? If so how likely is it you are going to miss a payment due to illness? Insurance polices can add up each month, could the money spent on them better be used to paying off the balances?

7, Cut your cards up!

If you have reached a point whereby you think you debts are too high why not cut your cards up? You can always order another one and you are instantly taking away the temptation of spending on them!

This post will be updated with more thoughts and ideas when they come to me. Debt is something that can be brought under control if you can bring it under control early enough.

For more information proceed to debt or bankruptcy help.

Read competent tips in the sphere of car finance calculator – your personal guide.

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