Debt Relief Solution

Personal debt is now a massive problem in the United Kingdom. Recent studies have revealed that almost one in five people have run up a debt of more than £10000 on credit cards, overdrafts and hire purchase agreements. That's more than 8 million people.

And even more alarming, quarter of these people owe six figure sums. That's right, more than 2 million people in the UK owe more than £100000. And that's before mortgage debt is added to the total. So if you're struggling with your debt, I've put together a debt relief solution that's related to the results of this latest debt study.

1. The vast majority (78%) of people who owed more than £10000, has credit card and store card debts.

Debt Relief Solution - Part 1
Credit card debt is bad enough, but store cards debt is horrendous. In general store card interest rates are much higher than on credit cards, often twice as high.

So if you have any store card debt, it should be possible to reduce the amount of interest you pay by transferring it to an existing credit card. And if you don't have a credit card or all your credit limit has been used, look for another low rate credit card to transfer your store card debt.

As soon as you've done that, cut up your store card and never use a store card ever again. This one small change will allow you to save substantial amounts of interest and help you to repay your debts in a shorter space of time.

2. Of the people who have plastic cards, 50% have at least three cards, and in 3% of cases they have more than ten.

Debt Relief Solution - Part 2
The first step is to increase your income and reduce your spending until you can live within your monthly income. You might want to consider shifting some of your credit card balances to a lower rate card to reduce the amount of interest that you pay.

The second stage is to cut up all of your credit cards. That will stop your debt growing. If you must have a credit card for convenience leave yourself the card with the lowest credit limit and the lowest interest rate.

Once you've done that, make yourself a promise that you will keep going until your debt is repaid. Every month that you spend less than you earn, your debt will reduce. If you can do that for long enough, you will get out of debt.

Every month, pay the minimum payment on each of your accounts and put the rest of your unused income towards repaying the card with the highest rate of interest. Once that debt disappears move your focus to the card with the next highest rate of interest. As each debt disappears you will have more money left to put towards them and the remaining debts will be repaid in a shorter period.

3. Of the people who owe money on plastic cards, 20% owe £5000-£10000, 12% owe £10000-£150000 and 21% owe more than £15000.

Debt Relief Solution - Part 3
If your credit card debts are causing you trouble it might be worth transferring your plastic debt to a low rate personal loan and cutting up your cards. A personal loan will have a fixed interest rate and level monthly repayments which will help you to budget. It will also make you repay the debt at a uniform level, removing the temptation to make the minimum repayment some months. It might also help you to save on the amount of interest that you pay if it helps you to repay the debt over a shorter period.

Part 2: Credit Debt Management

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