Tax rebates to be used as debt solutions

July signalled the start of the 2015 tax season which, for many, will result in tax rebates. Before you rush out and spend your extra cash on unnecessary items, you should consider settling some of your debt, thereby saving more money in the long run.

Paying off your debt as quickly as possible should be your highest priority while you are under debt counselling or using other debt solutions. Prioritise your debt repayments, improve your credit score and set yourself up for a future free of debt stress.

Using tax rebates is one form of alleviating and overcoming your debt quicker.

Here are some useful tips for using your tax rebate to settle your debt:

Settle small balances

When going about settling your debt, it is vital that you look at settling accounts with small balances first. Settle your small accounts to get as many accounts paid off as possible. The left over money in your monthly repayment should then be allocated towards other accounts, so that you can pay them off faster.

Settle expensive high interest debt

When using your tax rebate to settle debt, look at your debt profile to determine how much debt you have outstanding and how much you need to allocate towards paying off your debt.

Credit obligations, mainly short term credit and maxed out credit cards, are usually the most expensive types of debt. It is advised that you pay off your most expensive debt first, it will save you money over the longer term, as you will be paying less interest and more capital.

Big balances

DebtBusters has a specialised Debt Settlement department that can assist you. If you have an amount of R20,000 or more, you can email debtsettlement@debtbusters.co.za and we will try negotiate a discount with your credit providers for settling your accounts.

Two ways to make payment

1. Pay Hyphen PDA: Call DebtBusters on 086 999 0606 and select “option 2” before you make payment so we can arrange to pay off a specific account.
2. Pay your credit providers: and close the account. Make sure you get a paid up letter and send it csu@debtbusters.co.za.