Whats best?

jimmy_teabags

Im looking to cut my debts. Is it best to get a credit card to swap the balance of another one? Or to pay extra a month? I know the apr on one of my cards is 26% would it bebetter to get a low one?

MakeAChange_2

If you can get a lower interest rate then it's best to do that, there are some that don't charge interest for so many months I think. I'm not an expert but I'm sure someone else will be along soon and advise.

But generally if you can't clear it then get a lower interest one, transfer the balance then just close the first one. Don't be tempted to spend again on the first one though.

fatbelly

Do both - 0% balance transfer and overpay

http://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards

Plus £25-£30 free cash if you go through Quidco - a little more with topcashback.

£125 if you want to switch bank account to First Direct

http://www.moneysavingexpert.com/banking/compare-best-bank-accounts#firstdirect

enjoyyourshoes

if you do manage to get 0% and transfer debts, ensure you calculate how much you need to pay each month to get zero balance by end of 0% term. Then set up DD from bank account immediately to transfer this amount each month.

They can take a few weeks to set up with new CC so do sums accurately and ensure you meet the dd each month.

Then sort out why you are in debt ! (this is most crucial part of the strategy) Then solve the underlying issues

Then have a plan/system to know where you are financially every day and have enough accruals to pay for the 'forthcoming' bills (yearly/half and quarterly)

enthusiasticsaver

Cutting debts involves a combination of things.

First of all sort out a proper budget and allocate money to each category. Then you will know how much you can afford to pay each month towards each debt. You can post an soa to get advice on that (the link can be found on sticky on first page). Keep a spending diary to see where you are spending and where you can cut down. Try and cut costs to bare minimum by getting rid of unnecessary direct debits and getting on to the most economical package for phone, insurance, tv, internet and services.

Secondly make a note of all your debts and the interest rate you are paying on them. If you have any credit cards or interest free loans then record the date they finish or the offer date expires.

Thirdly move any credit cards/overdrafts that you can to 0% cards but only after checking the balance transfer fee/ any early redemption fees.

Finally when you have worked out how much you can afford to overpay each month allocate payments by paying minimum on all but the most expensive debt and pay this one off first. Once this has gone target the second most expensive or the one whose offer expires first.

ReadingTim

• Spend less
• Earn more

0% balance transfers, rate tarting etc are all well and good, but don't really address the underlying problem. Tackle that head on, rather than procrastinating around the edges with interest rates and the likes