If you’re struggling to find the best ways to pay off credit card debt, this can leave you with immense money worries and feeling as though you have little to no breathing space – especially with high interest rates making your debt harder to pay off, and the worry of your creditors taking action.
What Action Can My Creditors Take?
If you have fallen behind on debt repayments, your creditor may take any of the following actions:
- Add ‘missed payment’ and ‘default’ markers to your credit file, lowering your credit score.
- Take money from an account where you have available funds.
- Send your debt to a debt collector.
- Apply for a County Court Judgement (CCJ) – a court order that tells you to repay your debt.
- Instruct bailiffs
- Deduct money from your wages
- Apply for a charging order – if you own a property and your creditor has a CCJ registered against you, they can apply through the court to secure your debts against the property.
For more information on the different types of creditor action, click here.
But, to avoid reaching this point, there are ways you can start to pay off your credit card debt.
Stop Spending On Your Credit Card
One of the first things you should do is stop spending on your credit card. You could even take this as far as cutting up your credit card to avoid using it.
Spending more on your credit card while you are already in credit card debt will only make things more difficult – the amount you owe will increase and so will the amount of interest you’re charged each month.
Make A Spending Plan
A simple way to start paying off your credit card debt is to make a spending plan or budget. Sit down and work out a realistic amount you can afford to pay off each month, while making sure to leave yourself enough money to pay for priority bills and the essentials. If you have a partner, or you live with someone, and your expenses/debts are shared, you will need to take their finances into account.
Paying your minimum contractual payments is a great starting point if you can afford to. However, this can mean you don’t pay off much more than your interest. So, if you can afford to pay off a bit more than your bill each month, you will be able to pay off your credit card debt sooner.
Set Up A Balance Transfer Credit Card
What Is A Balance Transfer Credit Card?
A balance transfer credit card allows you to take debt from one or more credit cards that you’re paying interest on and move it to a different credit card. Some credit card providers offer 0% interest for a fixed period of time, usually, this ranges from 6-36 months.
If you choose to set up a balance transfer credit card, it is very important that you do not spend any money on this new card, as this will only build up what you owe even more.
Will A Balance Transfer Credit Card Help Me Pay Off My Debt?
A balance transfer credit card can be a helpful option if you can afford to pay off enough each month in order to clear the debt before the end of the interest-free period.
If you are only making the minimum payments each month, balance transfer credit cards can unfortunately offer little benefit.
For more information on how balance transfers can help you pay off credit card debt, click here.
If I Can’t Pay My Debts, What Do I Do?
If you can’t meet the minimum payments for your credit card debt each month, it may be worth contacting your credit card provider to see what they can do for you.
The Financial Conduct Authority (FCA) advises that creditors should consider offering a range of support options for people who struggle to meet their usual repayments. This may include:
- Offering a short-term pause on your monthly repayments.
- Coming to a reduced repayment arrangement.
- Reducing your overall interest.
It is worth contacting your creditor to meet an arrangement that is specific to you and your needs. Some providers may not offer a different repayment plan if they think it will cause long-term debt issues, so it is important to be honest with them about your situation to make sure any support they offer is necessary.
It’s also important to remember that making any of the above arrangements with your provider will impact your credit file.
Credit Card Debt Help
If you are struggling to pay off credit card debt, free* confidential debt advice is always available at Angel Advance. Contact us to speak to one of our friendly and knowledgeable debt advisers who can give you no-obligation debt advice and support, to help you decide on the best options for debt relief.
If all you need is some debt advice, this won’t affect your credit score. The free Angel Advance Online Debt Advice (ODA) tool is available to use any time, day or night. Our easy-to-use tool will help you weigh up the debt solutions available to you and give you the best recommendations for your unique situation on-screen, instantly.
*Our advice is free, but if you sign up for a debt solution, a fee will apply for some solutions.
