5 checks to help you avoid debt

A recent survey by uSwitch found that seven million people in the UK believe they are debt-free despite owing money. This means consumers could be incurring interest without being aware of it. For example, many people don't realise that monthly payments, such as for car insurance, are in fact repayments with interest. That's why we're sharing our five favourite tips to help you spot whether your bills are debt in disguise and keep your finances stable.

1. Beware of 'buy now, pay later'

If you’re paying for something in monthly instalments, or you buy an item and agree to pay later, you’re in debt. Even 'interest-free' or '0% APR' deals are a form of debt. There might be no interest for a fixed spell, but check the small print and you’ll often find that if you don’t pay by the agreed deadline, the retailer can backdate interest charges to the date of purchase – which means a much bigger final bill.

2. Use free budgeting tools

Your bank overdraft is debt. The easiest way to avoid it is to keep a close eye on your spending. Fortunately, there are more and more free tools for just that. Citizens Advice offers a simple online tool, while new companies like Mint and Money Dashboard provide more detailed breakdowns.

3. Get a free credit report

Credit reports aren’t just for finance firms; they’re for you, too. Get a free report from providers like Noddle to check your credit score, find out which companies have searched your credit history and see whom you’re in debt to.

4. Set up direct debits

Missing payments for monthly essentials like gas, electricity and council tax puts you in debt. That debt could be passed to an enforcement agency and you could face added collection charges if you don't pay. You can avoid this by setting up a direct debit, so your bank settles the bills automatically.

5. Reduce spending limits

Once you’re in control of your finances, you can remove the temptation to build up credit card and overdraft debt by requesting that the provider lowers your limit. Most banks have easily accessible online forms to do so.

If you’ve received an enforcement notice from Dukes Bailiffs, contact one of our friendly operators and we’ll help set up a manageable repayment plan to clear your debt.