Best way to clear store card debts

If you`re determined to tackle your debts - and do it on your own - it`s probably a good idea to tackle the ones with the highest interest rates first. For many people, that means finding a way to clear store card debts.

Often, the best way to do that is to overpay - to pay more than you`re actually obliged to. However tempting it is to make just the minimum payments, it`s important to think long term and focus on the amount of interest you`ll be saving if you clear your store card debts early.

Overpayment - a good way to clear store card debts

Overpaying means clearing your debts using your spare money - not the money you need for other things. There`s no point overpaying one debt if it means you`re falling behind on payments to other things.

In other words, you`d need to calculate how much money you`ll have left over after you`ve paid for your essential living expenses (your mortgage/rent, insurance, council tax, utility bills, food bills, etc.) and `serviced` (made your required payments to) all your unsecured debts, including the store card debt you`re focusing on.

If it turns out you have £50 a month of `spare` money, it`s well worth putting it towards your store card debt - it`s normally best to tackle the one with the highest interest rate first.

Once you`ve cleared that particular debt, you can turn your attention to the debt with the next-highest interest rate. This time, you should be able to put more towards it, as you`ll have one less debt to service every month!

Clearing store card debts - keeping motivated

Overpaying can make a real difference to your financial situation, but some people find that staying motivated is difficult. Many borrowers find that the best way to motivate themselves is with a calculator!

£500 of debt on a store card charging 25% will pick up £125 in interest in just one year, but £400 of debt will pick up just £100. In other words, putting another £100 towards that store card debt will save you a full £25 in interest over the next year alone.

Related resources:

• Homeowners advised to overpay on mortgages
• Debt Free in 2009
• Good time to overpay debt as base rate remains low
• Going debt free
• Debt Management
• Debt Advice

Tags: debt, overpay, store card, store card debt, overpay store card debt, how to get rid of store card debts, how to get rid of store card debts, getting rid of store card debts, clear debt, clear debts, clear store card debt, clear shopping debt, shopping, catalogue, catalogue debt, clear catalogue debt

Our initial advice on your best financial solution is free. Fees payable when continuing service is provided. Calls may be recorded for training and quality purposes.