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💸 4 easy ways to clear your credit card debt 💸⠀
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1️⃣ Always pay more than the minimum⠀
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The average credit card debt in the UK sits at around £6,400 with an average interest rate of 17.43%. These stats should hopefully make you feel a bit better about your own credit card debt and it is important to understand that you are not alone. When it comes to monthly repayments, most people opt to pay the minimum, however, this can prove costly.⠀
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Using our example above, if you only paid the minimum repayment each month (starting at £150 per month, then reducing to £149 the following month and so on) it would take you a whopping 33 years and 4 months to clear your credit card⠀
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However, if you fix the monthly repayment amount at £150 (assuming you can comfortably afford this each month) you will clear the balance in just 5 years and 4 months, plus you'll save over £5,000 in interest!⠀
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2️⃣ Prioritise expensive debt⠀
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If you have debt spread across multiple cards, organise the debt in order of priority e.g paying off the card with the highest interest rate first. Set a direct debit to pay the minimum (or a low fixed amount that you can afford) on the other cards and pay as much as you can off of the expensive card first (within budget).⠀
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3️⃣ Budget⠀
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Categorise your spending to see where your money is going each month. This will allow you to see what you could potentially cut back on to save money. There are numerous apps out there now that can help make budgeting easier including Monzo, Starling and Emma. Check out our article 'best budgeting apps' for more information. (link in bio)⠀
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4️⃣ Do a balance transfer⠀
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Transferring your credit card balance onto a 0% credit card will allow you to clear the debt over a series of months without paying any interest. Transferring the balance usually comes with a small fee (around 3%) but it will prevent you from paying the high-interest fees on your current card.
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