Q. Between last Christmas’s presents and my car breaking down last month, I have found my credit card is “maxed out” – they won’t raise the limit either – and I am finding it hard to pay it back. I have only been paying the minimum payment each month. I am finding it difficult to motivate myself to saving up to pay it off and wonder do you have any ideas for me to reduce the debt ? It is only 10 weeks to next Christmas and am dreading the merry go round already. Thanks Pete – Portarlington Co Laois
A. Credit is not evil, but it must be used wisely and judiciously Pete. In order to avoid common pitfalls of debt, you need to read the fine print, pay on time, and limit the amount of credit you have. If you miss a payment or are late – every payment is recorded in the credit agency (www.centralcreditregister.ie ), credit card companies can make money as they charge interest rates of 20%+ on balances – that’s why it will take you 20 years + to fully repay if you are only paying the minimum each month ! You may have “maxed” your credit card and you may not be able to pay off the entire debt now but there are 4 credit card companies that will allow you to transfer your balance on your credit card to them at 0% for 6 months (Permanent TSB & KBC Bank) 7 months (Bank of Ireland) and a whopping 12 months ( An Post Money ) giving you some breathing space to think about that debt but you might be able to pay off over a 6 to 12 month period. Beware also your credit standing is checked on everything – home and car loans, credit union loans, changing your current account from one bank to the next. So it is important to be organised and pay your card bill on time.