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Debt Management – Simple tips to stay afloat

By: Tony Roberts

Debt Management – Simple tips to stay afloat

Having lots of expensive credit can be a troubling experience, especially if you’re struggling to keep up with your monthly payments.
If you are on low income or income support this can be even more challenging. In this article we discuss ways to help you manage your financial commitment and achieve the holy grail of financial nirvana


This can often be the hardest thing to do. Especially if you have a family where its a constant battle to feed, clothe and entertain young ones. We are lucky that today there are some really great budgeting apps that can help you stick to a daily, weekly and monthly budget. Consider this Guardian guide . Budgeting nearly always means cutting back on non-essentials but by doing research and keeping on top of discounts you can really save on even the essentials. Use #pouch to identify savings and cashback sites like quidco to squeeze every drop from your budget. It all adds up.

Pay most expensive debt first

Lets say you have two credit cards each with a £500 balance. On card charges 22% APR and one charges 12% APR. How do you clear  both balances as quickly as possible with the least amount of effort. Easy! Pay the minimum monthly amount on the 12^ card. If you set up a direct debit this can be taken automatically from your bank account which crucially avoids late payment charges and negative marks on your credit score. Next, pay as much as you possibly can every month towards the 22% card until the minimum payment is equal to the 12% card. At that point split your monthly payments equally between the card. You’ll have saved a considerable amount of interest.

Consider consolidation

Consolidating debt can really make a difference to your monthly costs. Consolidating debt can be done in a number of ways

1. Credit card consolidation

If you have a fair or good credit score (see our post here for explanation of credit score) then you may be eligible for a 0% balance transfer card. This is a great way to bring high interest credit balances under one balance and you reduce the monthly interest paid – sometimes to 0% for a considerable length of time. The longest balances transfer deals are currently around 30 months at 0%. This will allow you to dedicate repayments to reducing the balance instead of paying interest.

2. Unsecured loan consolidation

Again, this will depend on your credit score but you may qualify for an unsecured loan to pay off those 20%+ interest rate credit accounts with a single monthly payment over a number of years. By the end of the loan period, you will have paid off the entire loan. But beware of high penalties for settling the loan early. These can be as much as 3 months penalty interest

3. Secured loan consolidation

If you have enough equity in your property, you might be eligible for a second charge loan. The key risk here is that your home may be repossesed if you dont keep up repayments.  But the major benefit of secured loan consolidation is that amounts can be substantial compared to unsecured loans and the interest rates are much lower.

Stay within your limits and keep up repayments

If you want to qualify for the best loan products; credit cards, loans, mortagages, the key here is to stay below your credit limits and to keep up repayments on time. Any limit breaches or late payments will have adverse effects on your credit score.

Paydayloanshub.co.uk can help you find the best payday loans or lending products on the market.

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