How to tackle your debts for a savvier new year
Are you suffering from a debt hangover? Now that we’re at the end of the holiday season, it can be a bit of a surprise waking up to a hefty credit card bill from all the gift-giving, eating out, holidays, and other festive celebrations. If you already have a mortgage or other loans that you’re trying to pay off, this can all become quite stressful!
Don’t fear! The Credit Savvy team have put together an action plan to help you tackle your debts in the New Year. Read on!
1. Assess your debts & create a budget
If you have multiple debts outstanding (a credit card balance, car loan, mortgage etc.), gather up all the details so you can work out the total amount owing on each account, what interest rate & fees your paying, and how long you have to pay them all off.
Creating a budget is essential when you’re trying to pay down your debts. Figure out how much money you have coming in and going out each month, so you know how much excess you have to put towards your debt. Be realistic with your budget and don’t forget that you change it as your circumstances change.
2. Assess your credit products
Once you have all the details of your accounts in front of you, you can begin to assess whether or not these credit products are the right fit for you. Maybe you have a credit card with a sky-high interest rate and could be better off with a balance transfer offer. Or maybe you have five personal loans on the go and could be better off consolidating them into one loan.
There is no “best”, one-size fits all product out there for everyone. The right product for you will depend on your personal situation, your credit score, how you want to pay off your debt, and your timeline.
3. Compare credit products
If you’ve decided that you want to switch up your credit products, use an online comparison service to compare what’s available in the market. Here at Credit Savvy, you can compare a range of credit cards, personal loans, and home loans all in one place.
But before you apply, make sure that you have read all the terms and conditions and that you fit the credit criteria. Remember, every time you apply for credit, it can show up as an enquiry on your credit file and impact your credit score.
4. Set up regular payments
Now that you have your payment plan in place, set up automatic, regular payments to the lender so that you don’t miss any of your repayments. Remember with Comprehensive Credit Reporting, your repayment history makes up a big part of your credit score!