How to get out of debt before January 31 in eight simple steps
CHRISTMAS is an expensive time of year - and if you've relied on credit to get through the festive season you could be facing up to a financial hangover when the bills arrive in January.
New research from uSwitch.com found nearly £8.5BILLION has been splurged on plastic to cover the cost of Christmas - with the average Brit borrowing £452.
But if you want to pay down your festive spending - or you're in a sizeable amount of debt - don't worry.
With the help of finance experts, here are eight tips so you can get out of debt in 2018.
Don't ignore your bills
It can really tempting - especially when they're piling up in January - to simply ignore your bills.
But that won't make the problem go away - in fact it will only make it worse.
Write down a list of all your debts, together with how much you owe, and when you're meant to re-pay the bills.
Then you can get a real picture of how much you owe.
Jonathan Chesterman, of debt charity StepChange, said the first steps to deal with the problem are often the hardest.
He said: "Dealing with debt can be difficult and can feel overwhelming.
"The first thing to do is get together all your paperwork to know the total amount that you owe."
Make a budget and prioritise
The next step is to make a detailed budget so you can see how much you have coming in and going out - and how much you can realistically afford to pay towards your debts each month.
Use an online tool like one from to help you do this.
Some bills like your rent, mortgage or council tax are classed as priority bills as if you fail to pay them you could be left homeless or end up in court.
Make sure you deal with these important debts first.
Slash your household bills
Your budget will not only reveal what luxuries you can cut back on, but also if you're paying too much for your household bills.
Brits are being overcharged by as much as £360 a year by their energy suppliers by being stuck on expensive Standard Variable Tariffs (SVTs) instead of cheaper deals.
Helpfully, switching is straight forward.
Use a comparison site like MoneySuperMarket or Energyhelpline to see what cheaper deals are available.
How to switch suppliers and save £300
Switching suppliers is the best way you can cut your energy bills. But recent research from MoneySuperMarket found that households are throwing away up to £300 a year by not bothering. Here's what you need to do.
1. Shop around - If you're on an expensive Standard Variable Tariff (SVT) deal you are throwing Away up to £300 a year. Use a comparion site like MoneySuperMarket.com or EnergyHelpline.com to see what best deals are available to you.
The cheapest deals are usually found online and are fixed deals - meaning you'll pay a fixed amount usually for 12 months.
2. Switch - When you've found one, all you have to do is contact the new supplier.
It helps to have the following information - which you can find on your bill - to hand to give the new supplier.
- Your postcode
- Name of your existing supplier
- Name of your existing deal and how much you pay
- An up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won't be interrupted in that time.
You might also be able to cut the cost of your council tax bill, depending on if you qualify for help.
Get a balance transfer card
If you're paying interest on your credit card balance, you should look at getting a 0 per cent balance transfer card.
These types of card will let you transfer an existing balance to a new card and gives you the chance to clear it fully without incurring interest.
Lorraine Charlton, of Citizens Advice, said: "You only get the 0 per cent interest on the transferred balance, not on any new spending - so be sure to not spend on this card, keep up with your repayments and pay off the balance before the interest-free period ends."
will let you know what deals you will likely qualify for.
The longest 0 per cent deals on the market currently stand at 38 months with Barclaycard and MBNA - but only those with excellent credit histories will get accepted for that long a deal.
So when you apply, you could be accepted by the provider but be offered a smaller 0 per cent period.
Remember to always try and clear your balance before the period ends - lenders rely on you failing to do this so they can start charging you interest, typically at a rate of between 15 - 2 5 per cent.
Make extra cash
Selling unwanted items and Christmas presents online can be a decent way of earning a little extra cash on the side.
Have a look around your house for any items you no longer use or want - clothes, DVDs, books - and put them on sale.
You might not make a fortune from them - but every little helps when it comes to paying down your bills.
If you're selling on eBay, make sure you set a reserve price, otherwise you might get less than what you wanted for your items.
See if you're entitled to any benefits
"It’s worth checking if you’re entitled to certain benefits or tax credits depending on your income and personal circumstances," Ms Charlton said.
The benefits system in the UK is complex but it's important that you get what you're entitled to - go to to see what help you can get.
How to cut the cost of your debt
Being in large amounts of debts can be really worrying. Here are some tips from Citizens Advice on how you can take action.
Check your bank balance on a regular basis - knowing your spending patterns is the first step to managing your money
Work out your budget - by writing down your income and taking away your essential bills such as food and transport.
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs
Pay off more than the minimum - If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker
Pay your most expensive credit card sooner - If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)
Prioritise your debts - If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them.
Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay.
Get advice - If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further.
Groups like Citizens Advice and Money Advice Trust can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans
Speak to your creditors
If you've done all you can to cut down on your spending and you're still struggling to make ends meet, then it's worth contacting your creditors to see what they can do to help.
You'll have to explain why you're in debt, what steps you're taking to get yourself out of the situation and how much you can afford to pay back.
Your lenders should try and help you, but if they don't agree to a repayment plan, you should contact a charity like StepChange or Citizens Advice.
CREDIT CRUNCH New rules mean credit card customers stuck in a debt spiral could have charges wiped
Mr Chesterman said: "If you don’t feel comfortable, or they won’t accept reduced payments, then contact one of the free debt advice agencies that can provide independent advice and support on your options."
Don't be afraid to ask for help
The worse thing you can do is ignore your debts.
StepChange says 50 per cent of its clients spend more than a year worrying about their debts before getting any help.
In that time, the situation will only have become worse - but there is help and support out there for those finding it hard going.
More on money
"There are formal and informal options available to you depending on where you live in the UK. There are different pros and cons for each option, so it’s crucial that you get advice before making any decisions," Mr Chesterman said.
Debt Management Plans (DMP), Debt Relief Orders (DRO) and Individual Voluntary Arrangements (IVA) can all help cut the cost of your debts - but the agreements are not to be taken lightly and aren't suitable for everyone.
How to get help for free
There are lots of groups who can help you with your problem debts.
- Citizens Advice - 0808 800 9060
- StepChange - 0800 138 1111
- National Debtline - 0808 808 4000
You can also find information about Debt Management Plans (DMP) and Individual Voluntary Arrangements (IVA) on the and on the Government's
Speak to one of these organisations - don't be tempted to use a claims managment firm that will claim it can write-off lots of your debts in return for a large up-front fee.
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at [email protected] or call 0207 78 24516