Martin Lewis advises consumers on how they can save money through a number of financial products but the Money Saving Expert also helps people manage their existing debts. On this, he covered one of the more problematic debts tonight, those held on credit cards.
Martin explained how credit card debt can be managed and reduced by the use of balance transfer cards.
He noted these cards will allow holders to pay off their debt without having to worry about added interest but he warned: “Now, don’t just apply for one of these that puts a mark on your credit file.
“Instead, use a balance transfer eligibility calculator first, it’ll show you which cards you’re most likely to be accepted for, there are a number of these out there.
“Once you’ve got your choice of cards. You want to go to the card with the lowest fee, within the zero percent lens.”
Martin concluded with the basic rules that should be followed with credit card debt and balance transfers: “Golden rules on balance transfers, never miss your minimum monthly repayment, do clear the debt, shift again before the zero percent ends, or you’ll pay the standard you know 20 percent APR and don’t spend or withdraw cash on these cards, it usually isn’t at the cheap rate.”
Debt could be a defining issue for 2021, with the latest data from the ONS showing millions are set to face financial difficulties in the months ahead.
It was revealed today that by December 2020, nearly nine million people had to borrow more than usual due to the pandemic.
Since June last year, the proportion of workers borrowing £1,000 or more had increased from 35 to 45 percent.
Kevin Pratt, a personal finance expert and editor of Forbes Advisor UK, commented on this and provided advice on how this debt could be managed: “Household finances for millions of people are under severe stress, so it is crucial that people save money wherever they can.
“That could mean switching energy suppliers to get a cheaper deal at the same time as reducing how much energy they use.
“It could mean going through a bank statement and weeding out any unnecessary direct debits for old subscriptions and memberships that are no longer used.
“Or it could involve moving credit card debt to a balance transfer card that doesn’t charge interest for anything up to two years or more.
“There might be a fee to pay, but escaping hefty interest charges for such a spell could make a big difference to the family’s overall financial situation.”
It should be remembered impartial debt advisors can be sought out for help with this and public institutions can assist with a number of financial problems, with the following being examples:
- The Money Advice Service
- Citizens Advice
- The Money and Pensions Service
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