Give your debt a fright!
Don't allow debt to sink its fangs into you. Here's how to scare it off!
It’s that time of year again, with ghouls, ghosts and goblins arriving at your front door in search of goodies (and that’s just the in-laws!).
However, while I can sleep easy with zombies, vampires and werewolves walking the streets, the one thing guaranteed to cause me to wake, screaming, in the middle of the night is the thought of my credit card bill.
Having spent a lot of money in recent months getting ready for our baby’s arrival, there’s a fair bit to pay off and I don’t want to end up getting whacked with painful interest payments.
So how do I turn the table on my debt and scare it off?
An antidote to debt!
One way to give your credit card debt an almighty fright is to move the debt onto a balance transfer credit card which offers 0% interest for an extended period.
This allows you to really spread the payments, rather than having to pay it all off at once.
At the moment, there are a stack of cracking balance transfer credit cards offering you 0% interest for over a year. However, it’s worth remembering that in order to move the debt over to a balance transfer card, you will have to pay a fee, usually around 3% of the debt itself. You also can’t transfer a debt within the same provider – so if the credit card you did your spending on is from MBNA, you can’t move it to another MBNA card!
I’ve put together a round-up of 10 tremendous balance transfer cards available at the minute.
|
Credit card |
Interest-free period |
Transfer fee |
|
16 months |
2.9% |
|
|
16 months |
2.9% |
|
|
16 months |
3% |
|
|
15 months |
2.98% |
|
|
15 months |
2.9% |
|
|
15 months |
2.9% |
|
|
15 months |
3% |
|
|
15 months |
2.9% |
|
|
14 months |
2.98% |
|
|
14 months |
3% |
The debt that won’t die!
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While 16 months seems like plenty of time for me to clear my relatively small debt, if you’ve got a large stack of debt on your card then it might not quite do the job. If your debt won’t die, then drive a stake through its heart with a lifetime balance transfer card.
These work in a similar fashion to traditional balance transfer cards, except that rather than having a period of 0% interest, you’ll enjoy a low rate of interest for the entire lifetime of the debt. What’s more, with some cards, you won’t have to pay a penny to move that debt over either!
Have a read of Three reasons not to get a 0% card for more on what size debt you need to have for a lifetime balance transfer card to work out cheapest. In the meantime, I’ve highlighted two of my favourite cards in this market at the moment.
|
Credit card |
APR |
Fee |
|
5.9% |
2% |
|
|
6.8% |
N/A |
Avoiding debt's clutches!
Of course, there is a way to prevent yourself from becoming a debt zombie in the first place, by being clever with your cards.
Rachel Robson explores one of the biggest debt myths around
If you know that you have some serious spending ahead, it's a pretty good idea to sort yourself out with a credit card offering interest-free purchases.
Much like using a 0% balance transfer card, this way you get to spread the payments of your purchases, without being punished with venomous interest charges along the way.
Below I've put together a collection of some of the best 0% on new purchases cards – think of them like your string of garlic for guarding against the vampires of debt!
|
Credit card |
Interest-free period |
|
13 months |
|
|
12 months |
|
|
12 months |
|
|
12 months |
|
|
12 months |
|
|
12 months |
|
|
10 months |
|
|
10 months |
|
|
10 months |
Overwhelmed by debt!
All of this is great if you're in a decent credit position overall. But what if debt has had its ghoulish clutches around you for far longer, to the point where your debt is far more serious than something that can be scared away simply by shuffling your credit cards around?
The first thing that has to happen is for you to get scared. Really scared. Many of us are only too happy to bury our heads in the sand, pretend things aren't really that bad. It's only by admitting we have a debt problem, and allowing it to give us a real fright that we can start to deal with our debts. Have a read of these 10 signs that you're in financial danger.
Once you've come to terms with the fact that you're in serious debt, there are several different debt antidotes available to you - so don't think you can't tackle it. For some, your debt can be killed simply by some budgeting adjustments. For others, a more formal arrangement, such as an IVA may be necessary.
And you don't have to do this on your own. The one way to work out the best method for you to scare off your debt for good is to talk. Get some advice from professionals, who can give you some guidance. Sure, there are plenty of firms that will offer debt advice and charge a fee, but given you can get that guidance for free, I'd definitely go with organisations such as Citizens Advice or the Consumer Credit Counselling Service. Be sure to have a read of where to get free debt services for some great tips on how to get the debt help you need.
More: Avoid the 40% rise in car insurance - quick! | 10 foods that will save you a fortune
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Comments
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The debate was fun whilst it lasted anyhow. I hope it will tickle someone else. To explain the chickens, well there is an old mothers tale that says 'you shouldn't count your chickens before they hatch'. which kinda means until what you have got what you purchased or reached the end of that year I would be so sure in saying you will make so much profit.
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bungall, i don't know what you are talking about. For some people a car is essential. This talk of crashing a car is not relevant to my original post as i am writing about the type of car one could buy and not whether to buy a car. So crashing a car is a possibility no matter what car one buys so i don't see the need to mention it. No, i wasn't taking about crashing cars into houses. I think the chances of having a crash in a car are more likely than having a fire in ones house over the same period in years. As regards house insurance many people are not properly insured and i'm sure there are a high percentage without contents insurance. Even those with insurance have insufficient locks on their doors and will find claims may not be paid out by the insurance companies. Cash is king when buying a car. Wasn't really referring to purchases online. I don't know what you mean by chicken points and you don't get what i am writing and we will have to agree to disagree in this instance.
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But you aren't buying a car from me so why can't you mention a crash? Ha Ha houses. Hmmm a house is totally different to a car. You see you think a car is essential, when really any car is a luxury whether it be a clacked out banger. A house, you live there, it is kinda meant to last a lot longer although most of them are only designed for a heck of a lot less, and idiots don't really crash into them as much. Its more likely you'll have a fire. Secondly didn't you buy house insurance immediately you bought a house? Isn't this mentioning fires when considering the purchase of a house. Why? Probably because the mortgage had a clause in there that it was required, to make sure they got the money back that was owed. Again you are missing some vital (chicken) points - cash ain't king if it is a credit card company's liability of getting you the goods that you have purchased online.
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01 November 2010