Credit Debt Management

4. One third of credit card debtors regularly apply for new introductory credit card offers to get lower interest rates.

Credit Debt Management - Part 4
It's a good idea to check rates on a regular basis to make sure that you don't pay more for your debts than you have to. But be careful that you're not doing it just to help you spend more.

5. Eighteen percent of people in the survey repay the minimum amount on their credit card debt each month.

Credit Debt Management - Part 5
This is an extremely bad idea and should be avoided at all costs. Some months it just can't be avoided. But if you find yourself falling into this trap month after month, it's vital that you take a detailed look at your finances and take action to escape this position.

In most cases, if you repay your credit card debt at the minimum amount each month, it will take you more than 30 years to repay, and you'll end up paying more than three times the amount that you originally borrowed. For more info take a look at our articles on credit card debt.

6. Two thirds of the people surveyed owe more than £10000 on a personal loan.

Credit Debt Management - Part 6
If the size of your personal loans are causing you trouble, or you have a number of different personal loans, it might be worth considering a consolidation loan. This will gather all your personal loans into one loan to take advantage of lower interest rates. It can be unsecured or secured over property you own in order to achieve an even lower rate of interest. For more info take a look at our articles on debt consolidation.

7. Of the people that owe more than £10000, 45% had an overdraft at an average level of £1850.

Credit Debt Management - Part 7
An overdraft puts you in an extremely weak position. Between the fees and interest charges it will cost you more per £100 borrowed than just about any other form of debt (with perhaps the exception of store cards). And that's before penalty fees are taken into account if you go over your agreed limit. And if that's not enough, the bank can ask you to repay the money instantly whenever they want.

So it's best to avoid an overdraft if at all possible. Take steps to pay off this type of debt first. And if you can't do it within a month consider moving the debt to a low cost credit card and then cancel your overdraft facility. For more info take a look at our article on overdraft debt.

8. Expectations on how long it would take to repay the unsecured debt varied. Most people thought they would take 6 years to repay it, while 13% expected it to take 10 years.

Credit Debt Management - Part 8
Aim to pay your debt off as quickly as possible (to reduce the amount of interest paid), but keep your expectations realistic. If you expect to be debt free within six months and you don't meet that target, it will cause great disappointment and dejection. It will also make it harder for you to keep chipping away at your debt.

So work out an achieveable period to repay your debts and keep going. As long as you spend less than your income each month, the size of your debt will keep shrinking.

Part 1: Debt Relief Solution

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