How the snowball method could help you pay off debts
DEBTS only get bigger unless you start trying to settle them, but when your debt mountain looks too big to tackle it can feel overwhelming to even get started.
Traditional financial advice has been to tackle the largest, highest interest debt first, helping to reducing interest payments - but the "snowball method" has the opposite approach.
It suggests starting with the smallest debts can be most effective for people who struggle to make a debt payment plan and stick to it.
Fans of the "snowball method" believe that paying off smaller balances can keep people motivated and on track as you get the regular satisfaction of knowing you have paid off a debt or closed an account.
Also, if you are being bombarded with debt letters and repayment calls, clearing some of the smallest balances can reduce the noise and stress of being in debt, even if the largest debt remains.
It can also to – some extent – help boost your credit score, says James Jones, head of consumer affairs at Experian.
Speak to one of these organisations - don't be tempted to use a claims managment firm that will say it can write-off lots of your debts in return for a large up-front fee.
Also, if you have heavy credit card debt, your credit score can be affected by something called “credit utilisation” – this is where you don’t have much credit spare.
James Jones of Experian says: “If you choose the so-called snowball method, and improving your credit score in the short to medium term is an important factor for you, then reducing the balances on any credit cards you have will help improve a measure we call ‘credit utilisation’.
“This is the percentage of your available credit in use, and the lower the better for credit scores.
“Critically, always remember to pay at least the minimum expected monthly payment on all of your open accounts, to avoid any damaging missed payments (which badly affect your credit score.)”
The Sun revealed last week how low income families can get free fridges and washing machines.
We also explained how to survive until payday, if you're running out of cash this month.
Plus, it's worth checking if you're missing thousands of pounds in benefits and Universal Credit.