Hulk actor Lou Ferrigno ñ a long-time friend of Michael Jackson ñ believes the stress of a $400 million debt killed the star rather than any drug problems,
Few of us will face the debt challenges Michael Jackson had to struggle with but thereís no doubt that debt can be a major worry. MoneyExpert.com looks at some tips to get the books back on track.
Get On Top
The key to tackling debt is to know where you stand and have a plan. Most people struggling with debt say that itís not the size of the debt itself which is a worry but their ability to repay it.
Set aside some time to assess your financial position. Dig out your bank statements and see when payments leave your account and then work out exactly how much you owe. Many people with multiple credit cards, credit agreements or unsecured loans donít have a clear idea of the scale of their debt until they take this step.
Keep Debt Cheap
Once debts hit a certain size, itís easy to spend all your time simply servicing the debt and only paying off the interest. When it comes to credit cards much of this cost can be avoided. Average credit card rates are currently running at around 18 per cent on a balance of £2,000 this would create £360 worth of interest over the course of a year.
By transferring your balance to a card with an introductory balance transfer period you can avoid this interest and start paying the off the debt itself. This principle of keep charges low can be applied to all forms of debt. Donít for example exceed overdraft limits or miss personal loan payments, expect charges if you do.
A Lump Sum
Another option could be to consider consolidating your debts and paying them off in one go with a personal loan. Lending might be in short supply but if you are able to secure finance you could find yourself with a much more manageable debt.
As mentioned the average credit card charges around 18 per cent but there a still loans out there available at a rate of eight or nine per cent. By using a loan like this it is possible to half the cost of your debt.
Thereís no need to suffer at the hands of debt. Whatever your position thereís likely to be options open to you. If you want to get on top of your finances then itís important to make money a priority and take the simple steps open to you such as minimising your interest repayments. If you are still at a loss then seek advice, there a dozens of advice websites available and the Citizen Advice Bureau is a useful starting point for impartial advice.