Ditch credit card debt for new financial you

SO YOU have decided to focus on your financial health. Congratulations! First things first: dump your credit card debt.

Remember that bargain pair of shoes you found a few months ago? The ones you put on your credit card? Well, they could soon cost you double the price-tag, with interest and fines.

Lenders rely on consumers to miss the odd payment. And, the minute you do, the interest rate rockets, because you're now classed as a 'high-risk' customer. You will also get fined. And suddenly that bargain becomes expensive. Becoming debt-free is never easy. You have to be uber-disciplined. But it is achievable.

Once you've reached that goal, go out and get the best deal. Almost all regional airlines, especially in the GCC, have a banking partner that offers air miles with credit cards. Don’t just ask your bank for this information. Visit your favourite airline’s website to find out who they've teamed up with. Read our guide to flying high for free.

cashy's comparison tables also have a wealth of information on other benefits – and interest rates. Now that you have picked your cashy-worthy credit card, go to the bank and apply for it. Read the fine print. Make sure the annual fee is zero or very low, and understand the details of the lender's interest rate policy. Get your calculator out and crunch those numbers: you'll soon see the folly of borrowing at such high interest rates.

It's also imperative that your debt doesn't mount up again. Pay off your credit card every two weeks, or even every week. It costs you nothing to log onto online banking and pay off the balance regularly.

If you want to be incredibly organised, every time you put something onto your credit card log onto your account that same day and make the payment – even if the purchase hasn't yet shown on your credit card statement. That way, you'll always be ahead of the game, and won't risk paying interest on purchases or being hit with late-payment fines.

If you question your ability to be this organised, or simply don't care about clocking up air miles, then you are better off without a credit card. Stick to a debit card. That way, you can never spend more than you can afford.

Pic credit: Rasmus Thomsen/ FreeDigitalPhotos.net

Have you managed to ditch your credit card debt? Tell us your top tips below!