Have you slipped into the pattern of putting everything on the plastic and ignored the consequences? You’re not alone. Most of us have done this at one time or another. And it’s incredibly easy to fall into the debt trap.
2004 and 2005 has seen credit card debt rise exponentially, along with the number of bankruptcies and insolvencies, both individually and commercially.
So, how can you avoid the debt trap in the first place and find your way out if you’re already there?
We all try not to overspend, but, with the cost of living increasing and the pressures of modern life, it’s not easy to keep our spending habits in check.
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What else do I need to know about managing debts?
You should aim to pay off your debts before you start saving. Interest rates on your debts will dwarf those on any savings, so it’s worth repaying your debts first. With interest rates at low levels, paying off your debts before building up your savings income is the wisest move.
The majority of companies are more sympathetic than you might think to people who can’t afford repayments. This is partially due to the huge cost such companies have to pay to recover debt. Therefore, most will be keen to work out a realistic payment programme that you can afford.