Clear your credit card debt quickly and save an astonishing amount of money

Statistics on credit card debt in the UK shows that credit card holders owe an average of 2,000 pounds on their credit cards.

With an interest rate of 17% and a monthly payment of 100 pounds it will take two years to pay off the 2,000 pounds debt. Now, assuming you cannot afford to pay the debt off at a rate of 100 pounds per month and paid an amount of 30 pounds instead it would take an astounding 17 years to pay off the credit card debt! It makes one think, doesn’t it?

Other ways to borrow money

People are looking to other means of borrowing money, including friends and family or payday lenders. Friends and family may not charge interest on the loan and payday lenders demand full payment of the debt on your next payday which means the short term loan is cleared from one month to the next.

Average household debt in the UK now stands at 13,000 pounds. Assuming a modest interest rate of 6% on this household debt a monthly repayment of 100 pounds will also take about 17 long years to repay. Credit has its place but perhaps it is time for many of us to rethink how we borrow money and how to save money instead.

Changing attitudes towards debt

At the top of the list should be changing attitudes to mortgages. A home is likely to be the most expensive item most of us are likely to buy. Not many people are fortunate enough to be able to pay cash for a home which leaves the only alternative which is to borrow money to buy the home. If you do need to get a mortgage to buy your home it will definitely be worth the effort of finding the best available rates for the mortgage.

There are literally thousands of deals to choose from in the UK so it should not be necessary to pay the full standard variable rate (SVR). If you are currently paying full SVR you are probably paying hundreds of pounds a year more than you need to pay. Over many years the hundreds of pounds add up to a substantial amount. It is, of course, essential to check the small print on any contract to ensure there are no hidden catches. Ask as many questions as you need to until you are fully satisfied that there are no catches. Banks may advertise that it is advantageous for you to be loyal to your bank but the truth is that the only advantage is in their favour, not yours. Your advantage is in getting the best possible rates on your mortgage!

Changing attitudes towards money in general is a good idea. I remember an extremely wealthy man once saying “spend your money as though it is your last 50 pounds”. Wise words indeed.

To calculate interest try this link: Financial calculators