One of the easiest ways to reduce monthly outgoings is to reduce the cost of household bills like gas, electricity, broadband, lending payments, and more. This article will details three ways to save money by reducing household bills.
1 – Consolidate lending
Different types of lending products have different interest rates. Short term lending products such as short term loans, credit cards and overdrafts normally have high interest rates, while long term lending products such as loans have lower interest rates. It’s possible to save a great deal of money each month by consolidating debt onto a single low interest rate product like a loan.
For example; if a family was to have 3 credit cards each with an APR (stands for ‘annual percentage rate’ – an indicator of how much interest has to be paid each year) averaging 18%, they would pay 18% of the balance in interest costs to the bank each year. If they were to take out a loan with an APR of 6% for the combined balance of the three credit cards, they would only pay 6% interest each year, meaning a net saving of 12% worth of interest each year.
This small reduction in interest could result in thousands being saved.
2 – Shop around for a better deal
Shopping around for alternative providers for insurance, gas, electricity, telephone lines, mobile phones, broadband, and other services can lead to huge savings on household bills.
A number of service providers hike up the cost of their services each year hoping their customers will remain complacent and happy to stay with them despite better value products being available elsewhere. Switching to a cheaper product from a competitor can be an easy way to reduce the cost of these services.
While it may be a time consuming process to check the products available from competitors, it can lead to large savings on the cost of household bills over time.
3 – Negotiate a better deal
Many service providers have a dedicated retentions team that are able to negotiate special pricing to keep customers from leaving. Most gas, electricity, mobile phone, television, broadband and insurance providers have retention teams.
Getting a better deal from a retention team is a relatively straightforward process; contact them by telephone and advise them that you wish to move to another provider. At this point, the retentions team will offer a reduction on the cost of the service in order to entice you to remain with them as a customer.
Savings will vary depending on the company and the retention team policies being enforced, but cost reductions as high as 75% are relatively common.
By following the three methods detailed in this article, it is possible to easily reduce the cost of household bills. While reducing household bills may be a time consuming process at first, it can lead to huge savings in the long run.
Article on behalf of Norton Finance: Debt Consolidation Experts