How to pay off a credit card

A credit card can be very useful but you do need to pay it off in full each month. Otherwise the credit card company will charge you between 25% and 35% per annum. For example, if you purchase an item for £100, in a year it will cost you around another £25. They make it complicated to work out because they get you to pay a minimum each month, but rest assured it is the most expensive way to borrow, apart from a loan shark!

In an ideal world you would not buy an item if you did not have the money. But if you have, the most important thing is to pay it off as quickly as possible. Try to scrimp and save to reduce the debt.

Look through your bank statement to identify what you need to live off. If you can, work with a friend to help you to minimise any outgoings. Then:

• Hide your credit card so that you do not make it worse

• Try to pay for things using cash or a debit card wherever possible

• Delete any shopping apps and remove your saved card details on-line

• Unsubscribe from store marketing emails

• Make it difficult to impulse buy – try to sleep on a purchase

• Consider how many hours you need to work to pay for a purchase before buying it

• Pay more than the minimum monthly payment whenever possible, as this can significantly reduce both the repayment period and the total interest paid

• If you get tempted to merge the debt on your cards with a 0% balance transfer, ensure that you clear the balance before the promotional period ends

Hopefully by doing these things you be able to pay down the credit card debt quickly. Then check out how to build up an emergency fund so that you don’t end up in a pickle again.