Cash ER: How to switch credit cards and clear your debt

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Take control of your debt before it gets out of control and follow this simple guide to switching your credit card.

Christmas credit card
New year, same old bank balance. Sigh. If you've already resorted to eating beans for tea until payday, listen up.

It's time to take control of your finances, especially where your credit card is concerned.

"Taking just a few minutes to review your funds is the first step in tackling debt," says Kevin Mountford, Head of Banking at "It's important to work out how much you can realistically afford to repay every month in order to find an appropriate product. This will help to ensure credit card debts are cleared in the most efficient way possible."

7 things to know before switching credit cards

1. Plan a realistic budget to pay off debts

If you are looking to switch your debt to a zero per cent deal then aim to pay it off before the balance transfer period ends, and ensure you can afford the monthly repayments to clear the debt.

2. Check the small print for transfer fees

Many providers charge a fee when moving onto a zero per cent credit card, so don't be caught out. Anyone looking to switch credit card debt should check whether they are allowed to transfer their balance to a new provider. Some providers prevent the transfer of existing debt to other cards within the card issuers group.

3. Switch to a low rate card

If you cannot afford to repay a debt on a zero per cent card within the zero per cent period then consider switching to a low rate credit card.

4. Check the credit limit you need

Even if you are accepted for a new deal, the credit limit you receive may not cover the entire balance you want to switch. If this is the case, then transfer as much as you can and then focus on paying off the remaining balance on your old card as quickly as possible while maintaining minimum repayments on the new one.

5. Pay off the balance

If you are unable to move your debt, then aim to pay off the balance as quickly as possible.

Paying off £150 a month on a £3,000 balance on a card with an average rate of 18.15 per cent would take two years. If you have more than one credit card, then pay off the most the debt that is accruing the most interest charges first, but don't forget to pay at least the minimum of the other cards.

6. Review your outgoings

If you are unable to switch to a cheaper deal and cannot afford to service your existing borrowing then look at alternative ways of paying off your debts. Review all of your outgoings and try to free some cash which can then be used to pay off debts. Concentrate on repaying the debt with the most expensive interest rate first as this is likely to be costing the most.

7. Don't bury your head in the sand

If your debts are unmanageable then seek immediate help from one of the free debt advice services such as Citizens Advice or Step Change who will be able offer help and advice.



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