How to get a grip on your personal finances in the new year – The Guardian
Are your finances feeling (even more) fragile as a result of Christmas spending? It’s been a really tough year financially for millions of people, and with a recession looming, mortgage and rent costs rising and the energy price guarantee becoming less generous from April, 2023 looks set to be even more challenging.
If you are in serious financial difficulty, seek free advice from an organisation such as StepChange or National Debtline as soon as possible.
However, if your situation is not quite so precarious, there are things you can do to get your finances into better shape. Now is a good time to take stock and look at where you can take action.
Cut your credit card costs
Many people’s plastic will have taken a pounding during the last few weeks, and some will have racked up a not inconsiderable credit card bill.
However, many individuals with credit and store card debt could save hundreds of pounds, or even thousands, by transferring these balances to another provider offering a better rate. In some cases you could pay no interest on your debts until well into 2025.
Some credit cards are offering interest-free deals lasting for more than two years
Balance transfers can be a very good way of saving money on existing debts. Your aim should be to have paid off all that you owe by the time the promotional period ends.
The weeks immediately after Christmas are typically the most popular for switching card balances. Official industry data shows that in January 2022, consumers made 682,000 transfers, with almost £1.4bn moved in the space of 31 days. The average amount transferred was just over £2,000.
Some credit cards are offering interest-free deals lasting for more than two years. The main benefit of a 0% balance transfer deal is that all of your monthly repayment goes towards clearing the outstanding balance, and therefore the debt can be cleared much more quickly – but you do need to be disciplined. Also be aware that there will often be a fee to pay, which is typically a small percentage of the amount of debt being moved.
The weeks immediately after Christmas are typically the most popular for …….