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Dealing with a financial hangover

After the Christmas and New Year break my credit card has taken a pounding. What can I do to reduce this debt as quickly as possible?

First of all you need to look at your capacity to increase the repayments above the minimum. If you only paid the minimum repayments it would turn into a 27-year loan.

Your credit card probably charges the highest rate of interest of any of your loans. If that's true for you, then paying this off may need to be your number one priority. Ideally, a well-trained credit card would be paid off in full each month. If you can't manage this, try to clear your debt within a couple of months.

If you have other loans as well, such as personal loans, you may look at the options available to restructure these into a lower more manageable loan. However, do your homework because it could cost you more in fees when setting up the consolidated loan.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

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Published on: Tuesday, February 01, 2011

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