Having debt is something that is uncomfortable and can cause long-term problems for those who don’t look at ways to deal with effectively, but it isn’t always 100% a bad thing. There are different ways to look at the personal debt we have accumulated, and as long as you are sensible in your approach and have a clear plan of action in mind, it shouldn’t stop you living your life and even taking out further credit, such as a short-term payday loan, as long as you do so within a framework that you are comfortable with.

All debt is bad debt

Of course there has always been irresponsible lending but those people who have absolutely no credit at all will find it difficult in future to secure a mortgage when they want to buy a house, or to find help through a loan for a business venture.

Make minimum payments only

We’re often told that it’s fine to keep paying the minimum amount on a credit card as it keeps the debt coming down on a monthly basis. In fact, all it is doing is making you pay much more over a longer period of time, as your debt remains intact for a longer time than is necessary. Always try to pay off more than the minimum to get rid of the debt faster.

Pay off your debt with high interest attached

Many people panic and pay off their large, high-interest debt first, but this can mean that we suffer from many different, smaller, debts running at the same time. In terms of motivation and seeing real progress on a consistent basis, you should start to pay off the smaller debts and work your way up to the larger. That way you can see that you are getting rid of your debt as the smaller repayments disappear.

Stay quiet about your repayment struggles

Most people assume that their loan provider won’t be able to help them if they are in financial difficulty, but it doesn’t solve any problems to stay silent and to let the issues get worse. The sooner you can talk to your creditor the more likely they are going to be able to help you find a solution.

Living with more than one credit card

If you use multiple credit cards with no plan to pay back your debt then it is a reckless thing to do, but if you can guarantee the balance of your credit can be paid off each month within your agreed terms, having multiple credit cards is a good thing for your credit score as it slowly builds trust.

Your overdraft is too expensive

Many of the high street banks will charge you for the privilege of using their overdraft facilities, but if you take your time to shop around and research carefully you will be able to find fee-free overdrafts for certain periods of time, or banks that offer a certain amount of an overdraft free if you use their other financial products.

Understanding what the reality is about the debt that you have and how to approach certain aspects of the structure of your debt repayments and when debt isn’t necessarily a bad thing entirely, will help you live more calmly in your life.