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Easy Steps to Repay a Credit Card

If you have credit card debt then you may want to repay it. However, it is not always that easy to know how you will be able to manage this. However, there is a process that you will be able to follow that will make it easier for you.

Check What you Owe

To start with make sure that you are aware of how much you owe. It isn’t nice being reminded of the figure, but it is worth finding out so that you know exactly what you are dealing with. It can also help to deter you from spending on it.

Stop Using the Card

It can be wise to put the card away for a while and not to use it until it is paid off. You will find that it can be tempting to use it and it is best not to do so until everything is repaid. This means that you will not be tempted to start using it as you pay off some of the balance. You might start to think that it is okay to do this, but it could mean that you end up owing as much or more money than before.

Pay at Least the Minimum

It is worth making sure that you always repay at least the minimum that is expected. You will get a statement each month with information as to what you need to pay and it is really important to make sure that you pay the minimum amount stated. You will find that you can set up a direct debit to pay this automatically which can help. Try to set it up so that the money comes out just after you are paid, so that you know that you will have enough in there to cover it. You may be able to change the date if you already have one set up, just get in touch with the card issuer.

See if You Can Pay Extra

It is good to pay more than the minimum. When you see the statement it can often seem like you are only able to either pay the minimum or pay the full balance. However, this is not the case. You can pay off any amount you like and so you may be wise to change the payment so that it is a bit more than the minimum. The minimum tends to just cover the interest and a little bit of the balance so if you can pay even a few pounds more then you will start to reduce what you owe. It is worth noting though, that you can also add lump sum repayments at any time, so this is something that you might like to do as well. Cobra has some great guides on effective money management also if you’re looking for a way to lower your payments further.

Pay in Lump Sums of Money

If you do decide to pay in lump sums of money, then you will need to find that money to be able to pay it. There are different places that you might be able to find the money. For example, you may have some money in a savings account that you could use to pay it off. This might not feel like the right thing to do as you may worry that you need that money for emergencies. However, if you repay the credit card and no longer have that interest to pay, you will have extra money which you could save up in order to pop back into your savings account.

Of course, you may not have savings so will need alternative ways to make the money to repay the card. If you can cut down what you spend, then you may have more money available this way. So, check prices on what you are buying and make sure that you are not spending more than necessary. Also think about everything that you are buying to make sure that you really need it. If you can cut down in both of these areas, then you will be able to spend less and you can use that money to pay towards the credit card.

Should I Take on a Lodger to get Some Extra Money?

There are lots of us that would like to make some extra money and there are lots of ways that we can try this. It is not an easy thing to do always though and taking on more work can be tricky and stressful and it may be that you just do not have the available time to do it. However, there might be easier options for you such as taking on a lodger. You will obviously need a spare room in your home and if you have this it can be good to think about whether having a lodger can be worthwhile.

How much Money Will it Make?

It is good to start by working out how much money you will be able to make. There will be lots of factors that will come into play here. For example, it will depend on the size of the room, where they will have an en-suite or shared bathroom access and whether there will have other private rooms. It will also depend on where you live and what the demand for housing is like as well as your specific location in relation to workplaces and services etc. Your location in the country will also determine the rent you can charge as well as how pretty the area you live in is. You will therefore have to check locally to find out how much you might be able to charge depending on what you can offer your lodger. You will then be able to keep this figure in mind when you are thinking about whether you think it is worth it.

Are There Any Costs?

You will need to think about whether there will be any costs involved with having a lodger. You may have to do certain safety checks or change your insurance, for example. Depending on your arrangements you may need to clean their sheets and provide them with food, although most lodgers would do this themselves. They may use electricity though, through heating their room, using electronics, washing and cooking which might be something you will need to ask them to pay for or incorporate into their rent charge.

Are There any Conditions?

You will need to make sure that you are allowed to have a lodger. You might find that if you are renting then you will not be allowed to sublet. But they will have to go through the letting agent to be able to rent with you. If you are buying your home through a mortgage you will have to contact the mortgage provider to see whether they will be happy for you to have a lodger. You need their permission because they effectively own a share of the house. You will also need to check with your insurance company as they may not allow it either and if they do, they will probably want to increase your premium.

Will I Cope with a Lodger?

You should also think about whether you will manage with a lodger in your home with you. Some people cope really well, but if you are used to living by yourself then perhaps having someone else there will be tricky for you. It may of course depend on who it is. If you are lucky enough to have a friend that needs somewhere to stay then that could work out really well but if not, you may have to choose between strangers and there is a risk that you may end up with someone that you do not get on well with. You will know whether you are the right sort of person to be able to get on with nearly everyone or whether you will need to consider carefully whether you will be able to cope.

Should I Monetise my Hobby?

Many of us will have a hobby that we put a lot of time into. If this is the case with you, then you may perhaps wonder whether you could make some money out of it. It is good to have a hard think about this though as you could find that you will not enjoy doing it as much as you thought. It is therefore worth considering the different aspects to this.

Make Money Doing What You Love

You could find that it will be really great making money doing something that you really love. If you do a job where you are not really enjoying what you are doing, then the idea of making money from something that you enjoy can be extremely appealing. Also, if you have been doing the hobby for a while, it is likely that you will know a lot about it and therefore you will be able to have lots of opportunities to make money from it. For example, you might be able to teach something about it, maybe in live classes at a local venue or by putting together an online course or YouTube videos. You might be able to sell things that you make, if you are an artist or craftsperson. You might be able to write a book about it. There might be different things that you can try which may earn you some money. It is good to start by having a think about what you might be able to do in order to make money from your hobby.

Pay May be Low

It is worth noting though that it could take a long term before you manage to make a decent amount of money from doing this. You will need to learn all about how to make money and where to make money and you may not be able to charge that much for what you are doing as well. It might be a lot of fun but you may find that it will not be that well paid and you may only be able to do it alongside your ordinary job. However, if you are happy with this and have the time, then it could be a good way to get some extra money without having to do extra hours in your job. But if you were hoping that you could rely on it as a full time income then this may not be possible.

Makes it Less Fun

It is worth being careful though. You need to think about what it will involve. It might involve learning new skills and doing things in a different way to how you normally do them. This could mean that you will have to take time away from your hobby to learn this. You might also find that you will not find these bits much fun and you might not really like it after a while. It might also put pressure on you while you are doing your hobby because you are always thinking about ways to make money from it. This could also mean that it will not be much fun for you either. Therefore, it is a good idea to think hard about it before you start. You want it to continue to be a relaxing hobby that you enjoy as you need it to wind down and reduce stress as well as to have fun. So, make sure that you feel it will still be able to remain as this if you do decide to monetise it or else you may suffer as a result of not being able to have a hobby that will allow you to have fun and feel relaxed and rested.

Should I Borrow Money to go on Holiday?

If you are planning a holiday then you may wonder whether you should borrow money in order to pay for it. There are advantages and disadvantages to doing this and it is a good idea to think about them so that you can decide whether it will be a good decision for you or whether you should find a different way, such as using savings or saving up to pay for the holiday. It will be a personal decision based on what you can afford and your attitude towards borrowing money and repaying it.

Cost

The first thing to consider is the cost. If you borrow money there will always be a cost. Well, you may be able to find an interest free loan, but that is very rare and so you will need to normally pay for borrowing the money. Loans do vary in cost but you will find that the costs will change depending on the type of loan that you take out, how long you have it for and how much you borrow and the lenders will also have different costs as well. It is well worth finding out how much the loan might cost as you can then decide whether you feel that it is worth paying that much for your loan. Remember this will add on to the cost of your holiday and so you might want to decide whether you feel that it will still be worth having the holiday if you are paying that much extra in cost. Remember to calculate it using the interest rate and any fees you have to pay on top, so you get the full cost.

Speed

If you decide not to go with a loan then an alternative could be to save up the money. Although this might be cheaper, it will mean that you might have to delay the holiday until you have had chance to save up. This could be difficult for you, particularly if there is a special reason for having the holiday at that specific time. With a loan, it is unlikely to take that long to arrange and you will be able to pay for your holiday pretty quickly.

Repayments

When you borrow money it will need to be repaid. Some loans will have a monthly repayment schedule where you have to repay a certain amount. It is worth finding out what this will be before you take out the loan. This is because you need to check whether you will be able to afford these repayments. It will not be much fun if you return form your holiday and immediately have the stress of trying to make loan repayments that you cannot afford. So, make sure that you know how much they will be and work out whether you will be able to afford it. If you think that it will be a struggle, then think about whether there will be anything that you can do that will make it easier for you. It might be that you will be able to cut back spending in some areas or find ways to earn a bit more so that it is easier.

Compare

If you do decide that you are going to borrow the money then make sure that you compare your options carefully. It is wise to make sure that you are getting really good value for money and therefore you will want to see what loans are on offer and which is most suited to your needs. You will want to make sure that you can afford the repayments and make sure that you are using the lender that you feel will give you the best value for money.

Will Paying my Overdraft Off Early be Worthwhile?

It is often said that we should repay our debts early. However, if you have debt such as an overdraft you may wonder whether it is worth trying to repay it early. It is good to have an understanding of overdrafts and then you will be able to make an easier decision as to whether you should make extra efforts to repay them.

How Overdrafts Work

An overdraft is on a current account and it works by allowing you to take out more money than you actually have. The bank or building society will let you know how much money you can borrow and then you will be able to use it for BACs payments, to draw cheques against and to draw cash. This will mean that you will be able to have it fall back on in an emergency, although some people do use them for all sorts of things including purchases that are not emergencies. There is not an official repayment schedule but the loan will be automatically repaid as money goes into the current account. Some people will allow that to happen and others may open a second current account so their salary does not repay the overdraft and therefore they delay repaying it.

How Repaying Quickly Can be Beneficial

It is really good though to try to repay it and do so as quickly as you can. This is because you will be charge interest on the money that you have borrowed and that interest will be charged daily until it is paid off. This means that you need to think about the cost of the loan and that if you can pay it off quicker then you will save money. Interest on overdrafts is very high as well – probably around 35% – 40% which is high compared to other borrowing methods and so you need to try to think of a way to make sure that you do not keep the loan for very long. Those people that keep them for a long time will end up paying out a lot of money and this is best avoided where possible.

How to Repay Early

So it is easy to make repayments as you just put money into your current account. Of course, finding the money to put in could be a problem but there are some different things that you could consider trying –

  • Sell things that you own and no longer need or want to raise some money using social media for sale pages, eBay, car boot sales etc
  • Use money from any savings accounts that you have to pay it off
  • Do some temp work to bring in some extra money
  • Find some extra freelance work
  • See if you can work some overtime in your current job
  • Look for some online work

There are different things that you can try and this is by no means an exhaustive list. It can be good to think about what you might have the time to do and what will suit the skills that you have. Alongside earning more, it can be a good idea to see whether you can reduce the amount that you spend. If you can cut back on buying things that are not necessary and try not to pay more than you have to for things, then you will be able to spend less money and you should have more to put towards paying off the overdraft. It may take a while, but it is worth persevering and trying hard to pay it off as soon as you can so that you avoid paying interest as much as possible.