Get free help

Well done, you’ve kept it going for a month and a half now.

Don’t stop working at it, even if you’re feeling down. Remember, there is free help around if you need it. If you’re getting nasty letters from credit card companies and you don’t think you can cope, get in touch with one of the free debt advice agencies:

• National Debtline (0808 808 4000)
• Citizens Advice (Citizens Advice Bureau)
• CCCS (Consumer Credit Counselling Service, 0800 138 1111)

But don’t turn to debt management companies. They will charge you for something you could get for free from one of the agencies above.

And don’t be fooled by their suggestions that they can halve your debts either. Many of these companies will make your situation worse. Some claim that they can halve your debts thanks to a ‘government loophole’. What they mean is they will sell you (yes, sell you – it costs) an IVA.

IVAs can be a good solution for some but they’re certainly not right for everyone. Also, they need to be set up by someone properly qualified, and not all of the people working for these debt companies have the right qualifications. It’s best to speak to the CCCS, National Debtline or the CAB to find out if this is the right solution for you.

Also, watch out for debt consolidation offers. Companies that offer debt consolidation will often tie you into a much worse situation than you have now by selling you loans that last for decades. They can end up making you lose your home. Only consolidate your debts if you have already started to cut back on your spending and you know you have the discipline to close down all your newly empty credit card accounts once you have switched over.

Stick to your budget with prepaid cards

As you know, one really great way of keeping your spending down is to cut up your plastic and only use cash. However, there are times when you need to use plastic (such as booking flights and other tickets online, or going on holiday).

The way you can get round this, and still stick to your budget, is to use a pre-paid card.

The cards works in the same way as a pay-as-you-go mobile phone: you top them up by however much you like and once the credit has reached zero, you can’t spend any more.

Are they available to everyone?

Anyone can get a pre-paid card. So long as you can prove who you are and where you live you can get one. It’s often better than taking cash around with you because if you lose your card or have it stolen you can phone up and put a stop on it. If you lose your cash, that’s it!

The only big downside to them is that they tend to charge you somewhere along the line and different ones charge you in different ways which can get confusing. You could be charged when you top them up, buy things in a shop or take out cash from an ATM.

So here are the pre-paid cards we recommend – depending on what you’re going to use them for:

A card that works like a bank account:

The Kube card

We like this card because it charges you a one-off purchase fee of £14.95 that covers you for three years and a monthly usage fee of £2.99 but it’s just 25p every time you make a purchase. It works like a bank account because you can do online banking through it and all your transactions get sent to your mobile phone.

Cards with no monthly fee:

• Bread FX Euro Prepaid Mastercard

The Bread FX Euro Prepaid Mastercard has the best rates amongst currency cards. You can only load it with Euros so it’s perfect for anyone going on a holiday in Europe.

Purchase fee: It’s free to sign up although a £10 desposit will be taken, which is returned when you put money on the card.

• There is a minimum initial load of £50.

Transaction fees:

• In the currency of the card, transactions are free
• In other Euroes a €2 fee applies
• An exchange fee of 2.5% of applies to all non-Euro transactions.

ATM withdrawals:

• In Euros are charged at €1.50
• In other currencies are charged at €2

Loading fee:  It’s free to load.

• Prime payment card

Purchase fee: £3
Monthly fee: Free (when used as a reloadable card)
Transaction fees: 2% (min 50p max £1)
ATM withdrawal: 75p
Loading fees: 2% (min 80p)

Card with no purchase fee:

• Paysafe Card
  

Purchase fee: Free
Monthly fee: Free
Transaction fees: Free
UK ATM withdrawal: N/A
ATM withdrawal abroad: N/A
Loading fees: Free

Best card for use abroad:

• FairFX.com Mastercard

Purchase fee: £9.95
Monthly fee: Free
Transaction fees: Free
ATM withdrawal: £1, 1.50€, $2, depending on the card currency.
Loading fees: Free
Replacement card: £5.99

The FairFX Mastercard is a really good deal. Although there is a purchase fee, the only other fee they charge is a cash withdrawal fee which is very reasonable. Although the cards only come in US dollars or euros, you can use them anywhere in the world and you will not be charged foreign exchange commission. They also have business exchange rates which means you get more foreign currency for your pound.

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