How to pay off your credit-card debt

If your finances are in the red, it's time to sort them out. And it makes sense to start with one of the most expensive debts - credit cards. Here's how.

It's set to be a record-breaking year for the economy but not in a good way. House prices have collapsed, unemployment is rising, and even though interest rates are at their lowest in more than 300 years, that's because we're likely to see deflation later this year, which makes holding debt more costly. So, if your finances are in the red, it's time to sort them out. One way to go about paying off your debt, is to shift it all onto a 0% credit card and then pay it off in chunks each month.

Before you start shopping for a 0% card you need to ask yourself a couple of questions. How big is your debt? And how quickly can you realistically pay it off?

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Once you have your card, set up a direct debit to pay off a chunk of the total each month. If you are late with a monthly payment you can put the 0% rate in jeopardy, so make sure you transfer the money in plenty of time each month. And don't forget the golden rule with 0% credit cards don't spend on them. As with most credit cards, you will pay off the money accruing the least interest first. So if you buy anything with your card you'll be running up interest at the provider's typical APR on that amount until you have paid off your entire balance transfer amount.

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