Being able to survive the credit crunch is largely about making lifestyle adjustments to provide room for manoeuvre. The problem is that too much credit card debt means there is little scope when bad things happen. This article will help people save money during the credit crunch.
Pay off Credit Card Debt During the Credit Crunch
Credit card debt is one of the most expensive forms of borrowing. Worse still, it rarely goes down in-line with interest rate reductions. Lenders are looking to cash-in during the credit crunch. Making the minimum payment prolongs credit card debt so ensure that as much is paid off as possible.
Pay Less Debt Interest by Performing a 0% APR Credit Card Balance Transfer
If credit card debt is an issue during the credit crunch, arrange a 0% credit card balance transfer. Paying 17% or more on a £3000 balance results in the payment of £510 interest each year. Transferring to a 0% APR credit card means that this saving can go towards reducing the balance.
Save Money on the Mortgage if on a Standard Variable Rate (SVR)
Should a borrower not have applied for a remortgage during the last few years the chances are that a Standard Variable Rate (SVR) will be in place. The banks won’t say a word as they get at least Bank of England base rate plus 2%. A tracker mortgage, for example, reduces the banks margin of profit.
Don’t simply go back to the existing lender, investigate a number of viable alternatives. Try to identify an independent mortgage advisor as they can conduct a search of the entire market to get the best rate. The high street banks are usually tied to one lender and reducing monthly repayments is crucial during the credit crunch.
The Cash ISA and Taking Advantage of Tax-Free Savings
The current credit crunch may have resulted in low interest rates, but paying needless tax on savings is rather foolish. If unhappy with the rate of interest on cash ISA’s, consider taking out a protected-capital stocks and shares ISA.
Unlawful Mortgage Agreements
Many borrowers were sold an bad credit mortgage and paid a higher rate of APR because a pushy salesman told them there was no alternative. There is a strong possibility that this constitutes an unlawful mortgage agreement and compensation is possible.
Reduce Monthly Financial Commitments with a Debt Management Plan
If struggling to pay off credit card debt and unsecured loans during the credit crunch, it is time to consider a Debt Management Plan. Being harassed by creditors for payment when it is clear they can’t be made is extremely stressful and upsetting.
Getting out of debt during the credit crunch isn’t just about making extra money, it is about lifestyle choices and spending. If the majority of debts are unsecured there are a number of debt solutions that can considerably reduce monthly outgoings, leaving extra cash to meet essential bills.