How to clear your credit cards

If you have racked up a lot of debt, and are finding it difficult to keep up repayments you should speak to your lender to see if there is any way you can temporarily reduce your repayments or (preferably) the cost of paying it back.

Firstly, it is always worth asking if they have a lower interest deal you could access in order to reduce your payments, and make the debt more manageable. If the answer is no, then ask what other options it may have available to you to reduce the amount of interest you are paying.

Be explicit - what you are asking is for the lender to reduce the interest you are being charged. If you don't ask, you don't get.

If reducing your interest repayments isn't an option you may want to ask them if you can take a repayment holiday to give you some breathing space. Another, option worth considering is to ask to spread the repayments over a longer period.

Remember though, while this will reduce the amount that you have to pay out each month, taking longer to repay the loan will mean that you are actually paying more in the long run, as the interest will still be charged.

You need to go to your lenders with a specific plan of what you feel you would be able to deal with in terms of repayments. Be realistic, as if you go too high in what you suggest and then struggle again, it will look bad for you. But don't be insulting and say you will pay a tiny amount back each month, as they are unlikely to take you seriously.

Contact the customer services department and explain that you are struggling financially and want to renegotiate your repayments so that you can - with the lender's help - make sure you can repay what you have borrowed.

You will need to explain any problems you are having; illness, redundancy, divorce and so on, so the lender understands why you cannot meet the repayments you previously agreed.

Some firms will write off a proportion of the debt, if you are struggling, but this could impact on your credit rating.

Of course, the downside of this approach is that if the lender refuses to help you, you have made it aware you are having difficulties and it may insist on a full repayment of the loan. That is unlikely to happen though, as so many people are in this position.