31. Ditch the debt

Live on less than you earn. Hey, radical concept.

If you’ve tried to remove the source of your debt you might well be even more worried. Consolidating credit card debts into personal loans (at a lower interest rate) sounds like a good idea but it only makes matters worse if you carry on spending and don’t deal with the original habits that got you into debt in the first place. (Hint: building up two debts is not the way to go.)

You’ve read it a million times before but here it is again. Get rid of credit card debt. There is no fast fix. It may well take you years.

Move all your debt to a single credit card or two with 0% interest (and remember, these 0% deals may not be around for ever so don’t think you can rely on them indefinitely to make the cost of your debt negligible). Check out the Saturday financial newspaper supplements for details of the best current deals. If you have a lot of debt, you will have to do this many times. Find out when your ‘grace period’ ends, and mark in your diary a month before you start paying interest. Start looking for a new deal then. Allow at least two weeks for the application to be processed and the transfers to be made, although internet banks are usually faster. Make sure you write to the old company cancelling your agreement and cut up the card.