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New Year’s Resolutions

New Year’s Resolutions

Category: Credit cards

Updated: 31/10/2008
First Published: 08/01/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Many of us will have lumbered ourselves with more debt than we should have done last year, and made a New Year's resolution to sort out our finances this year. Moneyfacts can help you stay true to your word and help you get back in control of your finances and make more

1) It may be hard, but sit down and write a list of all the money you owe (credit cards, loans, overdrafts, friends/family). Many people know that they have money problems but are either too scared or not prepared to face up to them

2) Draw up a list of your monthly expenditures, excluding your debt repayments. Make sure you factor in all the monthly essentials such as car tax, TV licence, insurance, groceries and utility bills. You should be left with a monthly 'disposable' income.

3) Once you have come to this figure, you know how much you can afford to pay towards all of your debts each month. Don't be down heartened if you find that you can't put your entire disposable income towards paying it off.

4) Work out what your most expensive debt is, and concentrate on paying it off first.

5) Make sure you know how much interest you are paying on your debts. Check against what it out there at the moment to make sure you are always getting the best deal.

6) Be realistic about how much you can pay off each month. Don't ever overstretch yourself or neglect paying for the essentials.

7) If you are paying existing credit card debts, ALWAYS destroy the cards and close the accounts. You may be tempted to use them at a later date.

Helpful Hint #1 - Credit Card Balance Transfer Deals

If you have built some debt on credit cards and store cards and you are paying interest rates of 20%+, you could be paying a great deal less. 0% balance transfer deals can work well for those with expensive debt to switch over.

  • Once you've transferred your balances, is to close the old card/loan accounts and also cut up your new card to stop you being tempted to use it for future purchases.
  • Use the 0% period to try and pay off as much as you can, and not the minimum monthly repayment.

Watch out for

  • Balance transfer fees. For the longer-term 0% deals these can be up to 2.98% of the balance.
  • Which bank funds the card you have. Although it may seem that there are plenty of credit cards available, in reality they are all funded by a handful of banks. You will not be able to transfer money from one card to another if they are funded by the same bank, so check this out before you apply, otherwise you could end up being refused and be faced with having to go through the application process all over again.

Check out the 0% balance transfer credit cards best buys

Helpful Hint # 2 - Personal loans

If you are paying high rates of interest on numerous credit cards and store cards and want to pay it off and be left with a more manageable single monthly repayment, then an unsecured personal loan could be the best route for you.

  • The advantage of a personal loan is that you have an agreed interest rate and monthly repayment, both of which are fixed for the full duration of your loan agreement.

Watch out for

  • The loan provider pushing you into buying expensive payment protection insurance (PPI) to go with it. If however you do want to protect your loan, you can find cheaper payment protection insurance through independent providers such as or British

Check out the personal loan best buys

Getting Help

If you find that your financial problems are more severe, the worst thing to do is to bury your head in the sand. You can seek free confidential advice from your local Citizens Advice Bureau or telephone the National Debtline on 0808 808 4000

Once you know exactly what you need to borrow, look at the refinancing solutions that are out there to help you to regain control your finances.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.