Shopping around for credit can be a difficult business. Picking a credit card is one of the most fraught in the industry. The rates they advertise can be highly attractive but the sad fact is that anything that seems too good to be true usually is. Behind the advertised rate lies an awful lot of small print and those attractive rates are soon balanced out when the introductory period ends. There’s no denying that a credit card is a handy thing to have though. So, here are a few pointers to help you manage your card and avoid the spiral of bad debt.

1. For those who only make the minimum repayment each month, which is one of the most expensive ways to borrow, you should definitely shop around to find a credit card with a really low APR or one that’s on a 0% interest deal. Paying just the minimum is never advisable though. You should make every effort to pay off whatever you can. Beware the end of the 0% period and make sure you do set up the direct debit to cover the minimum each month. Missing a payment will land you in trouble.
2. Transferring your balance to another card that’s advertising 0% balance transfers allows you to pay no interest for a fixed period. Once this period finishes, just be sure that you’ve paid off the debt, or be ready to transfer the balance again. If you don’t, the rate will usually be quite high, to balance out the introductory rate as before. It is also worth remembering that you shouldn’t spend on that card once you’ve transferred the balance to it.
3. There are other incentives designed to draw you into a credit card agreement but there’s no need for you not to take advantage as long as you manage the credit properly. It could be free gifts, free flights or vouchers for high street shops. Everybody likes something for nothing so read the small print carefully and go for it. Just be sure to cancel the card afterwards.
4. The idea of card hopping doesn’t appeal to everyone. For those looking for a good rate that you can stick with, just shop around for the lowest standard APR. It’s worth bearing in mind that the very best rates are saved for those with the best credit rating.
5. The convenience of carrying a card over cash is never more evident than when you’re on holiday. However, the associated fees can be huge. Cash advance withdrawals when you are abroad are among the most expensive ways to get that holiday cash. Know what charges are incurred when you use your credit card abroad and if this is a priority, there are providers that don’t charge for oversees usage.

For more financial advice, get in touch with the experts at www.debtsolver.co.uk.

A single missed monthly payment might not seem serious but the consequences can be a lot more severe than you would first think. They probably won’t send the bailiffs round and if you make it up, the lender probably won’t say anything but it can leave a lasting impression on your credit rating. Five and a half million of us missed a payment in the UK last year and may not grasp the effect that it could have.

It could be for a utility bill, a loan repayment, your mobile phone contract or your credit card but no matter what it was for, no matter how insignificant you thought it was, the impact it could have on your credit score could be serious.

A poor credit rating will affect your ability to secure credit, either preventing you altogether or costing you a lot more in rates. Maintaining a healthy credit rating is important and there are a number of ways to go about this. There is more information about how to look after your credit report available from www.debtsolver.co.uk but making your payments on time is a big part of it. A direct debit that will cover the minimum monthly payment will help to ensure that you pay on time, which is particularly important with credit cards.

However, it is worth remembering that the minimum payment is seldom enough to tackle the debt. If you transfer your balance to a card that offers a 0% rate of interest, all of your payments will go towards paying the balance back but often the best rates are reserved for those with the best credit rating. So, missed payments could have an impact on the deals you’re offered.

There are sites that allow you to compare the deals on the market and see which ones your credit profile qualify you for. Repairing your credit rating should be a priority and information on how to go about this is available from Debtsolver. There are also various debt solutions on the market in the UK and Debtsolver will be able to take you through these too, helping you to find the best one for someone in your situation.

A prepaid credit card can be a great way to limit your spending. It works more like a debit card, or a pay-as-you-go mobile phone. You simply top it up with however much you want to spend and you avoid going into debt by spending more than you can afford. You can take out a prepaid credit card from some banks, credit card companies and even supermarkets. The Debtsolver team have compiled this list of the pros and cons associated with prepaid credit cards to help you decide if they could be a solution to your mounting debt problem.

First of all, a major benefit of the prepaid credit card for those in debt is the ability to get without first having to go through a credit check. If you don’t want to provide any personal information, or you think your bad credit history would prevent you from taking out a credit card, they can be a great alternative.

Prepaid credit cards can be used at anywhere that accepts the brand of card you’ve gone for. You can use them to sign up for those sites that need a credit card rather than a debit card too, like payment services, shops and online auctions.

The main benefit of the prepaid credit card is the added control it gives you over your spending. Since you have to load the card, you have a much better sense of the value of the money you’re spending. It makes a big psychological difference to a credit card that gives you the idea that you can just buy now and pay later. You’ll find it far easier to keep track of the amount you’ve spent and as you need to know what you’ve got left on the card, you’ll keep better track of your spending. Put simply, you can’t spend what you don’t have, which can be a primary cause of debt problems.

There are drawbacks though. Although it can be seen as a benefit that you don’t have to provide any personal information in order to take out the card, there’s very little protection if you lose the card it’s stolen. Keeping a record of the card number, the company that issued the card and their phone number will allow you to report the loss. Don’t keep this information in your wallet though!

Often, the amount you can load on to the card can be limited. Obviously, if this isn’t as much as you think you’re going to need, this can be a substantial disadvantage of the prepaid credit card. However, this can also limit your spending, which might not be such a bad thing.

There are fees associated with prepaid credit cards but these will generally be paid up front. There are those that charge a small fee each time you use the card so make sure, as always, that you read all of the small print before taking one out.

If your level of personal debt is cause for concern, a prepaid credit card can offer some security in helping you to manage your spending. Visit www.debtsolver.co.uk for more ways to solve your debt problem.

If you’re struggling under the pressure of growing debt, following these six important steps will help you to become debt free. Of course, everyone’s financial circumstances are different so there is no single debt solution that will suit everyone. It’s only in the most severe cases that an individual will have to go through all of the steps. The idea is that the fewer steps that it takes to tackle your financial problems and get you debt free, the better.

1. At the first sign that you are struggling to keep up with your repayments, talk to your creditors. As simple as it sounds, if you show that you are dedicated to paying off your debt, in most cases they will do what they can to accommodate a re-evaluated repayment schedule. You should also consider getting some independent financial advice from a specialist debt advisor at the earliest opportunity. Drop into your local branch of the Citizens Advice Bureau or get in touch with Debtsolver.

2. If your debt problems are based on mortgage arrears, as with point one, you should talk to your mortgage provider as soon as possible. You may find that you can negotiate a revised payment plan, which could reduce the amount you pay each month. If you own a significant proportion of the equity in your home, you have substantial bargaining power when it comes to remortgaging.

3. If the bulk of your debt is unsecured, a Debt Management Plan can give you the support of a dedicated team of debt specialists, negotiating with your creditors in development of a repayment schedule to reduce your monthly outgoings. It’s not another loan; it’s one affordable monthly payment which is distributed among your creditors. With the support of Debtsolver, you can also encourage your creditors to freeze interest and additional charges.

4. If you want to clear all of your previous debts and take advantage of a reduced rate of interest, a Debt Consolidation Loan could be the solution to your debt problem. In addition to a lower rate of interest, debt consolidation has the added benefit of a simplified repayment schedule. Instead of a range of payment amounts going out at various points throughout the month, you’ll have the security of a steady budget. The loan can either be unsecured or secured against an asset like your home. Secured against collateral, you’ll often achieve a lower rate of interest, making the consolidation loan cheaper.

5. An IVA, or Individual Voluntary Arrangement, could prove to be your best option when struggling to service unsecured debt with at least three creditors which amounts to a minimum of £15,000. It differs from the more informal debt management plan in that an IVA is a legally binding contract made between you and your creditors. Debtsolver will help you to draw up a proposal, with the aim of reaching an agreement with your creditors to repay a realistic, affordable proportion of your outstanding debt over a set period, usually 60 months. The purpose of it is to become debt free but also avoid bankruptcy through settlement with the majority of your creditors. Even a proportion of your original loan total could prove to be preferable to them, when taking into account the expense of pursuing a bankruptcy order.

6. Bankruptcy is the most serious debt solution on the market. It’s certainly recommended that you consider the other options available to you first. Debtsolver will support you through the bankruptcy proceedings and you will eventually be free from debt. However, your assets may be sold to generate payment for your creditors. It’s important to remember that some debts, like your student loan and any outstanding Court fines, aren’t written off as part of your bankruptcy. It’s also worth considering the stigma associated with bankruptcy, which sadly, many people still believe surrounds the process as your bankruptcy will be advertised in your local newspapers and the London Gazette.

When it comes to tackling debt in the aftermath of a harsh financial climate, not to mention a pretty frosty actual climate, these two terms seem particularly apt. So, what is actually meant by snowballing and snowflaking your debt?

Firstly, ‘snowballing’ starts with looking at all of your different debts and prioritising them according to your circumstances. Whether you decide to start with the largest debts and work your way to the smallest or vice versa depends upon your debts and your point of view. On one hand, clearing away those small debts has the psychological benefit of seeing real progress. You get the sense of satisfaction that comes from clearing off a debt and then cutting up the credit card.

Tackling the largest debts first probably makes more mathematical sense and is often the one recommended by debt advisors as those are the ones that will be charging you the most interest. As everyone’s situation is different, there is no steadfast rule that will work for everyone, just as there is no debt solution that suits everyone. So, deciding between the smallest amount and the highest rate of interest is something that you should discuss with an impartial debt advisor.

Regardless of which end of the scale you start with, pay the minimum to the rest and throw everything you can at the target debt. Keep paying as much as you can as the debt comes down and the debt will reduce faster and faster, or ‘snowball’. Once you’ve paid it off, move the tactic to the next debt on the list and pay as much as you can towards that. Snowballing is all about momentum. As the debt is reduced, the interest is reduced but provided you keep the payment as high as possible, more goes to actually paying off the debt, rather than paying the interest.

Snowflaking, as it sounds, is less about the gathering of momentum and all about little and often. So, make any payment you can, no matter how small it is, whenever you can. You keep up with the minimum payments on all of your debt but target that one, as you would with snowballing, for constant chipping away, or flaking. Get it? Naturally, all of these snowflakes combine to make a snowball that keeps rolling on to the next debt as you pay the last one off.

As long as you’ve got a system and you’re sticking to your task, whether you snowball or snowflake is up to you. It’s all about making a speedy recovery from financial ill-health. Visit www.debtsolver.co.uk for a free, no obligation financial health check-up. A dedicated debt advisor will be able to offer guidance on the best debt solution to suit your circumstances.