Credit Card Debt Help & Advice

Types of Debt

Credit Card Debt Help & Advice


For many people across Scotland using a credit card is a way of life.

Often deemed to be a vital resource in households across the country, a credit card offers the chance to buy items and repay in installments to spread the cost of larger purchases. However, despite being undeniably handy when it comes to managing the cost of large unexpected payments, such as having to replace your washing machine or covering the cost of boiler breakdown repairs, if you find yourself turning to the plastic for everyday expenses you could be struggling with your debts.


Common causes of credit card debt

Making a payment with a credit card is a common part of 21st century life.

There are benefits of using a credit card – they are protected by section 75 of the Consumer Credit Act which protects purchases between £100 and £30,000 if the item is faulty or the company goes bust, but they can also lead to financial trouble.

Turning to a credit card might be simple and stress-free, however, they are the cause of debt problems for thousands of people across Scotland and the UK. Spending on a credit card may come with ease but it’s important never to lose sight of the fact that credit cards are a form of unsecured debt.

Interest rates can quickly add up if you only make the minimum repayment each month and soon the debt can become unmanageable.

It also isn’t difficult to find yourself facing the common causes of credit card debt. Whether you accidentally go over your agreed limit, make the minimum payment too late or find your circumstances change and you’re unable to make the minimum payment then your money worries could quickly add up.

If you are applying for a mortgage and are currently paying off credit card debt it’s important to note that lenders will add your credit card repayments to your monthly outgoings when considering if you would be able to afford your mortgage payments.

Lenders will typically assume a repayment of three to five per cent a month on credit card debt which can impact the amount you can borrow. That’s why it is recommended that you close any unused credit cards when applying for a mortgage as the more cards you have the higher your credit utilisation rate is.

Remember, not all debt is considered equal. When used sensibly credit cards are a valuable tool but if you aren’t mindful of your spending and budget for the cost of any expenses paid your debt could quickly spiral out of control.


How to manage credit card debt

Staying on top of credit card bills can sometimes seem easier said than done, but the most important thing is to be aware of the steps you can take to make sure that you don’t lose control of payments.

Be prepared

Sometimes life can be hectic and things such as bill payment dates can easily slip from memory. Setting up a standing order to cover the minimum payment is a simple way to ensure you never miss a payment.

Pay more if you can

If your circumstances allow, be sure to make an additional payment on top of your standing order to bring the balance down quicker and will ensure you’re paying off more than just the interest that is accruing.

Clear the balance

Credit cards may offer the chance to buy now pay later but it’s always good practice to pay off the full balance of a credit card each month if possible, to avoid facing interest charges.

Do your research

If you’re unable to pay off the balance in full, be sure to use a comparison site to find a lower, or zero interest deal to allow you to pay off more of what you owe each month.

Budgeting is key

Plan for more than the minimum payment each month using a household budget – even when money is tight. A simple budget will ensure that you are able to cover the cost of your essential living costs whilst still steadily repaying what you owe to a credit card.

Find debt help suited for you

If you’re struggling to make ends meet and are unable to make the minimum repayments on your credit card debt, it’s important to take action as soon as possible. There are various debt solutions that can help if you’re struggling, including a Trust Deed, Debt Arrangement Scheme or Sequestration. Always seek advice about what support is available for you.

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