It is easy to get into debt. But it can be much harder to get out.
Here are some tips for how to start getting on top of your debts.
Look at your debts, including credit card, car loan and personal loans. Then work out the interest rate for each of your debts. Focus on paying off the debt with the highest interest rate first.
The Commission for Financial Capability suggests trying to make bigger payments if you can.
Sometimes a bank or lender can combine several higher-interest loans into one lower-interest loan. The Commission's website sorted.org.nz has some advice on the pros and cons of debt consolidation.
Debt consolidation loans usually have a lower interest rate and tend to be spread over a longer period so the weekly or monthly payments are smaller.
A single payment is also easier to manage -- but consolidating your loans won't work if you take on more debt.
The Commission says there are other potential pitfalls.
Lower repayments but over a longer term can add to the overall cost because we're paying interest for longer.
You also need to consider extra fees and charges, including 'hidden' fees for alterations, late payments and payment defaults.
The Commission points out you might even be charged extra for paying off existing loans early.
Companies that specialise in debt consolidation may charge higher interest than a bank. So you should talk to the bank before signing up with a new company.
Always shop around and always read the fine print.
If you are struggling, talk to your lender about a new repayment plan.
There is also free and confidential advice available from the NZ Federation of Family Budgeting Services. Call them on 0508 BUDGET (0508 283 438).