Pay off debt fast: 4 debt-cutting tips that really pay off

Co-author: Michelle Norton

Christmas is fast approaching, so it’s a great time to reassess spending and to start paying off debt before you hit the often expensive season.

If you’re searching for ways to get out of debt, so you can start some guilt-free Christmas shopping, it helps to take a step back and have a look at your own financial situation. Personal debt is well and truly an entrenched part of our financial lives.

If you want to avoid giving the banks early Christmas presents in the form of fees and penalties, then you’ll want to read our guide on how to pay down that festive debt.

Tips for paying off debt

own up to debt early

 

1. Pay your “must-do” costs first: When our wages hit our bank account, It’s tempting to have a big night out, followed up by some online shopping. But it means that our necessary costs – things like food, petrol and phone bills – can end up on our credit card. So, each time you get paid, cover all your must-do costs before you look at any other spending, so you can get out of debt – and stay out.

2. Cancel direct debts: Whether it is gym fees, subscriptions or insurance, paying bills automatically is a convenient way to get those payments made. But, when expenses are being put on your credit card, it’s too easy not to pay them back. Switch those automatic payments to a debit card instead and this will help you avoid having to start paying off debt incurred from interest.

3.Don’t use your credit card:

Tough love, yes, but, provided you’re doing tips one and two above, you’ll be amazed how much spending you can cut out of your day without easy access to the plastic. It’s worth a try, so you can get out of debt!

Also, if you do have an ongoing debt, check that you’re not paying more interest than you need to. Check out Canstar’s personal loan and credit card ratings, to see what’s on offer.

4. Consider debt consolidation: 

If you have multiple debts – multiple credit cards for example – you could consider consolidating them onto a personal loan. One significant benefit of consolidating your credit cards onto a personal loan is that a personal loan has a defined lifespan. That is, your repayments are calculated in order for you to be able to pay the loan off over a certain time frame. You can compare personal loans and personal loan providers with Canstar, here.

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