Martin Lewis explains the two best ways to tackle debt – including what to pay off first
Martin Lewis gives financial advice on dealing with debt
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When people are in debt, it is worth seeking professional help. This means the person is “on the path to sorting it out” as they are ready to take action, Martin Lewis has explained. On ITVs Lorraine this morning, the money saving expert gave two ways in which he believes can deal with debt.
People can get new cards to pay off their debts on the old card.
The benefits of this is that when paying off their new card, this will be at a lower rate.
Mr Lewis said: “If you’re able to do, that’s a good thing.”
He said: “List all the different debts you’ve got in order of the interest rate, in order of the APR.
“Then you pay the minimums off everything except the most expensive one and put all your spare cash towards clearing that because the highest APR one is the one costing you the most.
“Once you’ve got rid of that, you move to the next best, and of course try not to borrow anymore.”
He urged Britons to “do a budget”.
For those people who are seriously worried about their debts, Mr Lewis gave another way to deal with debts.
This suggestion is for people who may be a year’s worth of income in debt, not counting their mortgage, or they can’t afford to pay their minimum payments.
These organisations do not judge, and they are there to help Britons find a solution for their problems.
They are free to use and have many different resources available to help people.
They provide debt management plans to help people budget. They also help write up for bankruptcy.
Mr Lewis added: “This may sound awful, but the truth is bankruptcy is it stops all your debts and stops anyone chasing you.
“Yes, it takes time to rebuild your credit worthiness over a number of years, but in some cases even that is that solution.
“The biggest message I get from people when they’ve been to a non-profit debt counselling agency is, ‘I finally slept last night.’”
The money saving expert concluded: “I wish you the best, don’t be scared of it.
“Deal with it, that’s the best way to make it get better.
“I’ve been doing this for many years now and I’ve never once seen a case of debt that isn’t solvable.
“There is light at the end of the tunnel, even if it is a long one.”
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