Reduce Debts With Your Tax Rebate
Reduce Debts With Your Tax Rebate
The tax rebate is one of those sources of income that a lot of people do not really pay much attention to. A lot of people will go on an unbudgeted spending spree simply because they think that the money that they have just received is not really the money that they had planned and should therefore not be treated seriously. However, I would like to use this article to point out the fact that your rebate is something that is very important and if at all you can use it correctly, you will be able to go a long way in ensuring that your credit burden is reduced, thereby increasing your credit rating. Although there are several ways of spending this money that you have received from the Revenue and Customs, we are going to focus on those ways that will help you in reducing your debts.
Pay Off Your Credit Card Balances
The first thing that you should do the moment you lay your hands on the precious tax rebate is to ensure that you have paid off your credit card balances. There are so many people who incur debts through their credit cards but who do not know the full extent that the debts may have on their finances. However, if you use the money that you have received from the refund to pay up some of the debts of your credit card, you will not be easily bogged down by many small debts that can easily amount to much if added together.
Sort Out Your Cash Advances
The second thing that you should do if at all you have received the tax rebate is to make sure that you have sorted out your cash advances. This means that you must pay them out as soon as you have the money. The cash advances I am talking about here are those monies that you have borrowed from friends, relatives and colleagues at work.
Increase Your Loan Repayments
If you are in a situation were you are already paying up your loans, it is advisable that you use your tax rebate to increase your loan repayments to the bank. Although this might not go a long way to reduce the amount of interest that you will have to pay, it will help you reduce your future loan repayment burden.
Having said all this, it is proper for me to state that the information that has been given here is not that exhaustive. If you have other ideas on how you can reduce your debt burden with the help of a tax rebate, then you can contribute here.
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