By Emsie Martin
It’s a new year and the perfect time for a fresh start, but perhaps your vacation was a tad lavish and your credit cards operated to their limits. Now you need another year to pay your credit card debt. Here are a few hints to recover from your holiday debt as fast as possible.
Make sure how much you owe
Perhaps at the end of the month you shun away from opening window envelopes that land in your post box, you don’t read emails and avoid unknown numbers on your phone, but ignoring all of this will definitely not make the problem go away. Make time, check every account and make sure everything is correct.
Make a plan
Credit bureaus provide one free credit report per year. Apply for your report and check it thoroughly. Then use this information to design a plan for paying off your debt as fast as possible. Pay a bit more than the minimum amount every month.
Put away your credit cards
Avoid unnecessary waste while you are paying off your credit cards. A much better idea is to lock them away until fully paid. Do not fall into the trap of spending money you have already paid. Look at the interest rate that you pay on your credit card. If the interest rate is 20%, every R1 000 you spend will cost you another R200. You could have paid this R200 on your credit card.
Consolidate your debt
If you owe a lot on your credit card, it could be difficult to pay it off quickly. If this is the case, you could perhaps find relief by consolidating this debt into one personal loan at a lower interest rate. If you do not qualify for a personal loan, look at the interest rates on competitive cards.
Tax return ─ start early
Perhaps it’s still in the distant future, but if you are expecting a refund from SARS after you have submitted your tax return, use that money to make your credit-card debt less. Submit your return early and don’t wait until the cut-off date. You could perhaps escape a month or two’s interest on your credit card.
Do not let debt take the enjoyment out of your life, think before you spend unnecessarily, pay you debt as quickly as possible, and start saving sensibly!
You can visit http://creditbureau.co.za/ for more information about TransUnion, Experian, Compuscan and Xpert Decision Systems (XDS) credit bureaus.