If you've overspent on your summer break, here are some ways to get back in the black fast.
If you’ve overspent on your holiday, the relaxing time you enjoyed while you were away could now be replaced by anxiety and fear.
It’s easy to get carried away when you’re away from home and there’s a card to put everything on. Particularly given over half of us don’t set out a budget for our holidays, according to research by M&S Bank.
So how do you go about getting yourself back on track now? Here are some ideas.
Draw up a budget now
You may not have done it on holiday, but now is the time to sit down and work out how much you’re spending and what you’re spending it on. Write down all your expenditure, from your mortgage/rent right down to that chocolate bar you bought on your way home one night.
Look for areas you can cut back on to free up some money to pay off your holiday spending.
You could use our free MoneyTrack budgeting tool to help you see all your spending in one place. MoneyTrack allows you to view your current accounts and credit cards. You can also tag your spending, so you can see at a glance how much you’re spending by category, and set budgets.
Sell some stuff
[SPOTLIGHT]If you have CDs you don't listen to, DVDs you don't watch or clothes lying around that you don't wear anymore then you could sell them to help pay off your debt.
You could try the likes of eBay, Amazon Marketplace, Play.com's PlayTrade or the ASOS Marketplace.
Shift your debt to a cheaper credit card
If you’re paying a lot of interest on your debt on a credit card, then it makes sense to move it to a cheaper balance transfer credit card. At the moment, if you have a good credit rating you can pay no interest on your debt for up to 28 months with Barclaycard's Platinum 28-Month card.
However, you will have to pay a balance transfer fee for this privilege, which is a percentage of the debt you're transferring, and these vary by credit card. Here are the top combinations of balance transfer period and balance transfer fee.
| Credit card | 0% balance transfer introductory period | Balance transfer fee | Representative APR when 0% period ends |
|
24 months |
1.5% |
17.9% |
|
|
24 months |
1.5% |
17.9% |
|
|
15 months |
0.9% |
16.9% |
|
|
15 months |
0.9% |
16.9% |
|
|
15 months |
1% |
17.9% |
|
|
15 months |
1% |
17.9% |
|
|
12 months |
0.9% |
16.9% |
Once you have that interest-free cushion, chip away at your debt each month. Just make sure when you're picking your credit card you give yourself enough time to pay your debt off in full before you start being charged interest.
If your credit rating isn’t great, then you could opt for a low rate credit card. For example, Lloyds TSB offers the Advance card, which charges a representative APR (which means 51% of applicants will receive the rate) of 4.9% for 12 months. There’s a 3% balance transfer fee on this card.
Use an overdraft
Another, potentially free option if you have a good credit rating is to switch banks to one that offers an interest- and fee-free overdraft.
There are only a handful of these around, and the Nationwide FlexDirect is by far the best, as there’s no interest and no fees for 12 months.
Use a loan
You should try to avoid paying off your debt with a loan if at all possible, especially a payday loan, unless you’ve racked up big debts. If that’s the case, you should cut up your credit cards, draw up a budget and stick to it.
Otherwise, you face the prospect of still paying your debt off for several summers to come.
If your debt is giving you sleepless nights, you should contact a free, confidential debt advice charity. You can find out more about what help is out there in Where to get free debt advice.