These days, residents of the United Kingdom have taken on credit card and mortgage debts that are at record levels. This may cause many people to head for a fall. There are steps to avoid getting deeply into debt. If you are already carrying a large load you may be having difficulty coping and wondering how to fix the damage.

Avoiding Getting into Debt

It seems everyone has some sort of debt or another these days. In order to avoid getting into a financial mess the most obvious answer is to not overspend. This is the most common reason that people are finding themselves in the red. If you cannot trust yourself to use a credit card wisely than you should avoid using them altogether. Each time you have a late payment your credit card interest rate can rise until you are paying rates that are astronomical.

If you think that you can manage having a credit card without overspending, be sure that you choose one that has a rate of interest that is low. Some cards offer introductory rates that seem quite attractive but once the grace period is over the interest rate can increase to a ridiculous rate.

What Type of Rate Should You Be Paying on Your Credit Card?

Unfortunately many residents of the United Kingdom are paying high interest rates on their credit card balances. There are a wide variety of fair deals that are available for credit cards. The Bank of England’s base interest rate is just 5% and there are many cards that offer rates that are only slightly higher. Too many consumers are paying close to 20% if not higher for the interest rate on credit cards. This results in a huge loss of your money. It is thought that some of the better known credit card companies have never had more expensive interest rates than they do now.

Many credit card offers try and lure you with a 0% interest rate and this is typically for a limited period of time. You can always switch to a better rate of interest once the “bonus” period is over. There are plenty of credit cards where you are pre-approved that will allow you to do this.

If you have been receiving harassing telephone calls from creditors and you have started to lose ground as to paying back your overwhelming credit card debt there are things you can do besides changing your name or declaring bankruptcy.

Consolidate Your Debt

One thing you can do is to consolidate your debt. There are many credit cards that are available that offer a 0% introductory period for as long as a year. You can transfer your credit card balances to these cards so that you can actually make some headway in paying down your outstanding credit card debt. Once the introductory rate period has ended, you can simply transfer the remaining outstanding balance to another credit card that is offering a 0% or very low interest rate.

If you own a home you can always apply for a home equity loan so that you can pay off your credit card balances. This allows you to have one bill to pay each month rather than a number of cheques you need to write. Your home equity loan will often offer you a much lower rate of interest than what you are currently paying on outstanding balances on your credit cards and you can take care of all that debt in one full swoop. Just be careful that once you pay off the credit cards you do not run them up again.

There are a variety of debt consolidation companies that are also financial advisors. They will negotiate with your creditors to come up with a sound financial plan that allows you to pay back your outstanding credit card balances without draining your bank accounts. They will also advise you how to use your credit cards responsibly so that you don’t find yourself in this situation again.

Paying Down Your Credit Cards Yourself

Another way to pay off your debt more quickly is to pay down your debt on your own. What you can do is get all your credit card information as to balances and interest rates that you are currently paying. The credit cards that have the highest interest rates are the ones you should concentrate on first.

Pay the minimum or a little more if you can afford it for the other credit cards and concentrate on paying a larger amount each month on the credit card with the highest interest rate. Once you have eliminated the outstanding balance you now go on to the card with the next highest interest rate until you have paid off all your credit cards in full.

You should not be using your credit cards during this time as this will serve no purpose when you are trying to pay down your debt. Having a credit card can be more than a little convenient, but if you do not manage your credit wisely it will make it difficult for you to make major purchases such as a new car or a home further down the road.

Eliminating Credit Card Debt

As the world's financial situation seems to become increasingly unstable and more people become ever more concerned about the possibility of unemployment or some other financial problem outside their control. They are finally beginning to consider implementing some kind of control over their credit card debt.

The debts from the excessive use of credit cards represent a disease that can be eliminated. The problem is ever upward spiralling credit card debt is becoming a reality for more people. As with most diseases, people tend to ignore the problem until it reaches a point where its effects are impossible to ignore.

Taking action as soon as possible is the best way to deal with both financial and physical diseases; you need to take control of your finances now. To eliminate your debt credit card as soon as possible, and at lower cost, I recommend you use a method proven repeatedly to be effective, and which is often recommended by financial experts.

These are the basic steps to help anyone deal with credit card debt problems

1. Start by making a list of all your credit cards, and include
           - The amount;
           - The interest rate;
           - The minimum payment;
           - The minimum payment, based on your last bill for each card.

2. The minimum payment is found on your credit card statement or your contract, and is generally between 2% and 2.5% of the total.

3. Rearrange the list so that the credit card with the highest interest rate is at the top of list.

4. Add together the minimum payments required for all cards.

5.  Decide how much money you can put aside each month, in addition to the total minimum payments due. Apply this amount on your debt. If you think you can not afford to pay additional amounts in excess of the minimum payment, it is time to make a budget and find ways to reduce your expenses.

6. Each month, pay the minimum balance on each credit card except the one with the highest interest rate. On this particular balance, pay the minimum balance and add the extra amount you identified in Step 5.

7. Do this every month until the balance of your first credit card (the one with the highest interest rate) is fully paid. Then take the amount you pay so far on this card, add it the amount of the minimum balance on the second credit card to your list, and apply the total on the second credit card each month until that the balance is paid; continue to pay the minimum balance on all other credit cards.

8. Continue until all your debts credit card are eliminated.

Some financial experts recommend first paying credit cards that have the lowest balance, rather than attacking those who have the highest interest rates. I do not agree with this approach because, although it might make you feel better to see the number of credit cards outstanding fall, this approach will cost you more money in the end.