The two surest ways to lose control of your spending in these increasingly difficult times is to hang onto already over extended credit cards and to not pay all your bills by direct debit.

Credit cards have become the last refuge for many people struggling to meet the gap between their paycheques and the grocery bill at the end of the month and as such, they are often considered to be a lifeline. But at what price?

If you barely pay the minimum required payment, then you’re becoming a slave to the card, not its master. Your debt is growing exponentially and will take many years – perhaps as many as 10, even 20 years – to clear it at that repayment pace.

There are cheaper life-lines, the first of which is the one you fashion for yourself by doing a root and branch review and cull of your essential spending in order to get better value and then by keeping a spending diary of all your daily purchases as well as the other discretionary purchases throughout the year: the holidays, dining out, second car, clothing and electronics, home décor, hobbies and sport activities, even the choice of a private rather than state education for your children.

The next lifeline, which will hopefully be a lot smaller and more affordable once you’ve done a proper budget, is to get rid of the credit cards that got you into so much trouble and replace it with just a debit card or a debit Visa card. The latter provides Visa facilities, including using it for web-based purchases and for withdrawing money at international ATMs, but requires payment directly out of your current account. There is no credit or borrowing facility and so no build up of high interest payments.

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