Beating the credit crunch

Dealing with economic challenges and beating the credit crunch is more difficult for people already struggling with large amounts of debt and high interest rates. Finding options to make your credit more manageable are a bit tougher during tightened credit market periods. However, there are some great tips that can help anyone, regardless of your current situation, better maneuver through the credit challenges. There are several opportunities to cut expenses and find savings.

One of the first areas in which consumers can more effectively negative the tight credit market is in the retail sector. Retail businesses, like consumers, are struggling to drive sales and make money. Stores, and especially online retailers, have slashed prices across the board in many cases. Steep discounts are available, so shopping wisely to find the best prices on the products you need is a great way to beat the credit crunch. There are also some great budget-priced or discount-driven stores that provide regular, ongoing price breaks. Now might be a good time to learn about value-priced retailers in your area. There are also some retailers that run mailing lists and provide discount vouchers or rebate offers to customers. Look into signing up for some of them.

Another way to make it through is to reduce your level of borrowing. Historically, many consumers worked through their credit challenges by routinely moving from one creditor to the next to take advantage of zero per cent transfer opportunities and other deals. These deals are not readily available in a tight market. This is especially the case for those that are already stuck with high credit balances. As such, it is important to improve your current credit situation by paying off as much debt as possible. Start first with higher rate balances and meet all other minimum payment obligations. People with savings are likely earning less on savings accounts than they pay in credit balance interest. Thus, it is smarter to use savings funds to pay down high rate credit balances.

Beating the credit crunch requires discipline and proper financial management. Unfortunately, those that are in the most precarious positions likely lacked discipline when building up high amounts of debt. Still, the situation is not hopeless. The key is to look for all savings opportunities, cut costs, and reduce borrowing during the hard times. Eventually, when the credit sector recovers and credit is more available, there may be some nice opportunities to consolidate debt, reduce monthly payments, and lower the amount of interest paid on debt.

So, successfully beating the credit crunch is a battle of emotions and mentality. It is important to make decisions using logical judgement. Thus, do not panic if faced with a tough financial situation and significant debt. Take some time to sit down and explore all of the money saving and debt reducing opportunities. Remember these three tips:

• Look for discount price opportunities through retailers
• Reduce your level of borrowing to avoid worsening your credit situation
• Cut your expenses in whatever ways possible

Six Simple Ways to Ease the Credit Crunch

Like it or not, the country – and indeed, most of the world – is in the icy grip of the credit crunch. However, there are ways to help make these financial straits a little easier to bear. Here are six tips to help you weather the current monetary storm:

1. Set a budget (and stick to it).
This is really the golden rule of personal finance. Make sure you know exactly how much you have, exactly how much you need, and exactly how much you have left over at the end of the month. If you do this, and make sure you always have a little bit extra tucked away in case of an unforeseen emergency – a boiler breakdown in the middle of January, or your car’s engine finally giving up the ghost and needing a trip to the garage – the credit crunch won’t cause you too many problems. Aim for three months’ typical expenditure (six months’ worth, if you’re self-employed), and you’ll find a lot of worries disappear from your shoulders.

2. Pay off your debts.
Just because money’s tight, it doesn’t mean that you can afford to forget about your debts. The more you can pay off and still live comfortably, the better you’ll be in the long run, as you’ll end up paying back less interest. Try and put as much as possible towards your repayments, and avoid only paying back the monthly minimum if you can at all avoid it.

3. Try second-hand.
If you absolutely have to make a big purchase – furniture, for example, or white goods and electrical products – you might want to consider trying second-hand shops and other non-new retail outlets. It’s possible to pick up some real bargains… and besides, does it really matter if your washing machine isn’t fresh out of the showroom?

4. Don’t be afraid to haggle.
If you’re making a big purchase and second-hand doesn’t really work for you, don’t be afraid to haggle. Most major retail outlets (especially for larger items) have some degree of flexibility with prices, and may be able to make you an offer. While it might not amount to much, you don’t get anything if you don’t ask. What have you got to lose?

5. Use your loyalty points.
The vast majority of people have loyalty cards tucked away in their purse or wallet, slowly accumulating points that can be redeemed for store credit, special offers, or reduced prices on getaways or other out-of-store treats. Now’s the time to cash them in, and get back some of the (often surprisingly large amount) of money that you’ve got saved up on your plastic. After all, it’s not gaining interest, and it’s tied up in a very specific place. If you’re going to be making a purchase at a shop you’re in a points-scheme with already, it should help to keep a few more pennies about your person – and every little helps.

6. Keep looking.
Even if you think you’re pretty well bunkered-in as far riding out the credit crunch goes, there are always savings to be made – especially in uncertain times like these, where the financial playing field can shift rapidly. If you pride yourself on being financially savvy, it doesn’t hurt to keep a lookout for new offers and deals coming up that could save you considerable amounts of money.