Debt, more than 12 million people are afflicted by it. This financial disease has to end and that’s only possible with knowledge and action to back it up. You should know a few specific topics so you are armed with facts to check your finances and see how best you can spend them and eventually resolve your debt crisis.
1. Utilities – Gas and electricity prices are going up and, if the current global fuel consumption is anything to judge by, they won’t drop to manageable payment levels. However, check to see if you are on a fixed deal or standard tariff. These prices will never change (depending on the market), but it isn’t always a good thing. You can save so much money if you shift to a current market leading deal. If it means changing your utility company, be honest, tell them you can’t afford them anymore, and change to the new utility provider who has a reasonable deal that you can pay per month.
2. Overdraft – This is a word used by credit card companies to declare on paper how much money you owe them. You will have to pay a fee for this overdraft because it’s in excess of your credit balance. There are companies that charge you little to nothing for these overdrafts and offer you a very small fee after the ‘free’ period. Some companies allow you to shift your overdraft to a current account or have cash-back features. You’ve to undergo an affordability assessment test for these. The idea is for you to be aware that there are ways to save your money and options to pay less than you might currently be.
3. Mortgage – Discuss your options with a mortgage advisor before you plan on anything. Remortgaging an existing home loan that’s been a financial factor for a long time can help reduce your interest rate for it.
4. Insurance – Getting the best deal for your financial situation is your best bet. You’ll certainly need the security that insurance brings so choose aptly so you aren’t burdened with yet another debt to add to your list.
5. Credit Cards – Get a card that has a long zero interest deal for purchases. This is good for those who can’t pay the monthly total. A loyalty scheme for extra benefits is not a bad idea either. Cards that use smart point systems to help you with purchases, much like coupons, are a good way to save money. Interest-free purchases are also available on some cards so keep an eye open for that. Examples of companies who offer such deals include Marks & Spencer’s credit card and Tesco Club card both of whom have a 15-month interest-free period for purchases made. Marks & Spencer’s gives you one point for every £1 you spend in their store, and one point for every £2 you spend in other M&S stores; 100 points gets you a voucher for £1. The Tesco card gives you one point for every £1 spent on their products, and one point per £4 spent on non-Tesco items.