If you have long-term debts that you are struggling to pay off then it makes sense to look at ways to resolve that problem before it becomes insurmountable. Take serious stock of your situation first and see if there is any way you can pay just a little bit more off your debt each month to control debt that is accumulating. Just paying a small amount more can have a big effect and gradually help you regain control of your debt situation. But you won’t regain control until you start being pro-active in reducing your debt. This may mean taking a long hard look at your spending habits and lifestyle and prioritizing paying off the debt above anything else that isn’t absolutely essential. It will also mean reviewing the amounts you are paying and looking at ways to cut your interest rates. Try talking to a debt charity if you cannot do this on your own – they can offer debt advice for free.

Reduce Your Interest Payments

There are a number of ways you can reduce your interest payments:

• Consolidate your debt into one loan that will be cheaper over the term of the debt. Remember this doesn’t just mean looking for a cheaper interest rate as the loan length will also affect how much you repay overall.
• Transfer credit card debt using a 0% balance transfer deal – but check the small print for the transfer fee, the length of the interest-free period and the rate once the interest-free period ends. And make every effort to pay the debt off over the interest-free period.
• If you have a bad credit score ask your parents if they will consider acting as a guarantor on a loan for you. Guarantor loans are generally at a lower interest rate than any  bad credit loans that you might be able to get without their help.

Change Your Spending Habits

When you receive your salary what do you immediately think – great, I can buy that new dress/shoes/guitar/phone or great, we can go out for a slap-up meal or just stay in a get a take-away and a good bottle of wine. That’s a fine approach to take if your debt is under control but if you are not managing to pay off more than the absolute minimum each month then you are heading for a long-term debt situation that will end up costing you much more in the long-run than it needs to.

So stop and think about what your priorities are – do you really need to be extravagant and splash out each time you get paid or would it be more cost-effective over time if you started to actually clear your debt rather than maintaining it at too-high levels?

If you are maxed out on all your credit cards, remember that can have a negative effect on your credit score that won’t be helpful if you need any sort of major loan for a special holiday, a new car, moving house or home improvements.