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Studies suggest that 8.3 million people are dealing with debt in the UK alone. As a percentage of the population, it’s around 11%. However, this stat isn’t the most shocking one. The figure that stands out is the average amount, which is at £8,000 by the according to www.theguardian.com. The sad truth is that people don’t have a single debt but many different arrears. And, this makes the process of getting out two, three, four times harder.
If the stats above are relatable, then you need to hear some good news. Well, get ready to jump for joy because this post is going to tell you how to deal with multiple debts.
Contents
Prioritise
It’s tempting to assume that all debt is created equal, the truth is very different. Certain arrears will have features which make them the number one priority. For example, 0% interest credit cards shoot up to around 20% after the promotional period. If the other debts have a lower rate, then you want to tackle the big one first. That way, you won’t shell out a fortune in interest. When the prices are similar, try and consider factors such as momentum. Paying off the cheapest balance often proves to people that they can tackle their debts head-on.
Transfer
Credit cards are often the main type of debt because they are easy to obtain. Thankfully, they are simple to switch, too, and this info is essential. Say there are three or four cards under your name and they’re all racking up money – what should you do? The answer is to try and transfer the balance to a company that has better offers. Finding a 0% interest promotion is a short-term solution because you will have to pay in the end. Still, it provides an element of protection as you can worry about it down the line.
Consolidate
The problem with multiple debts is the amount of data. There is too much to keep track of without losing your mind. The sheer weight of the info is enough to send you into a spiral. So, it makes sense to consolidate the responsibility into one monthly payment. This has its risks according to https://www.sofi.com/personal-loans/credit-card-consolidation-loans/ but there are plenty of pros also. For example, if you are unorganised, the fact that you will pay slightly more in the long-term is moot. Being unable to keep up with the payments means you’ll end up in more debt, so consolidation is savvy.
Negotiate
Haggling isn’t part of the British culture. Brits see the price, complain, and still pay the full amount regardless. As such, trying to haggle over the amount you owe is a foreign concept. And, it’s one which you may think is bound to fail. But, remember this – what’s the worst thing that can happen? All they can say is “no, we aren’t willing to budge” and you have lost nothing. However, if they understand the severity of the situation, they will play along. After all, they want their money even if it’s in dribs and drabs.
Do you feel more confident now after reading this tips?
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