Get credit confidence this summer

Before you borrow, check out our seven-step guide:

Remember to only take out credit when you can pay it back. Ask yourself these three essential questions:

• Do I need it?
• Can I afford it?
• Can I pay it off next month?

If you are struggling with credit debt, get help as soon as you can. These are the signs you might need debt advice:

• Using credit to get by until payday or to cover essentials
• Struggling to make repayments
• Being charged for late repayments

When you use a credit card, loan or overdraft, you will usually pay interest – this is the cost of borrowing, shown as a percentage. You might also have to pay extra fees, like yearly charges or late payment fees.

If you pay off everything you owe each month, you can often avoid paying interest. Always check the terms and conditions or use a credit calculator so you know what it will cost.

If you can, aim to pay off all your debt in one go. If paying it all off right away is not possible, always pay more than the minimum payments to reduce the debt faster and save on interest.

Focus on eliminating high-interest debts first. Also, avoid adding new charges while you are paying down your balance.

Usually there is no interest to pay on BNPL, but it is still a loan. If you have lots of BNPL purchases the repayments can stack up. You can also be charged high fees and interest if you fall behind.

A debt consolidation loan lets you combine several debts into one, often with lower interest and easier payments. You can also move credit card debt to a card with a lower rate. It means paying just one company each month, but the payments could be bigger or last longer – and you might end up paying more overall.

Make sure the repayments fit your budget.

Many companies say they can ‘write off’ your credit debt for you using a legal loophole. Be particularly wary if they ask for upfront fees to do the job. Remember if it is too good to be true, it probably is.