Managing Credit Card Debt
A credit card offers a flexible way to pay for goods and services which you may not be able to immediately afford. You may find yourself unable to repay part of your outstanding balance, and fall into debt. If you are struggling with repayments you should speak to your credit card provider as soon as possible to discuss your possible repayment options. Agencies such as the National Debtline and the Citizens Advice Bureau offer free advice and may negotiate with your card provider on your behalf. The UK has one of the worst personal debt records in Europe, and recent reports suggest that one in ten people admit to not knowing how much debt they are actually in.
To avoid getting into debt, you should ensure that you only borrow what you know that you can afford to repay, and aim to pay off more than the minimum monthly repayment. Even though a credit card provider may issue you with a £2,000 limit, this does not mean that you should aim to spend this amount. You should regard the limit as an absolute maximum. Make sure that you know when the balance has to be paid, and aim to pay it in full and on time.
Remember that whichever method you use to pay off your balance, there will be a period of time between sending the payment and your credit card provider receiving it. For example, electronic transfer will usually take three working days. If you have set up a direct debit, you should try and ensure that it is not deducted before you have the required funds in your current account. If the direct debit is deducted and there are insufficient funds to honour the payment, you may face large overdraft charges.
If you are sensible with your credit card, only spending what you know you can afford to repay each month, you can avoid unnecessary interest charges and remain debt-free. If you are worried about debt, seek advice from your local Citizens Advice Bureau or the National Debtline.
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