We all know that most of us need to reduce our personal debt, not just for our own pockets but for the sake of the economy. Although it’s a depressing figure, by the end of January 2012 the total UK personal debt stood at £1,456 trillion.

However, it need not all be doom and gloom; there are still opportunities to treat ourselves without being totally out of pocket. Getting out of debt can mean not overindulging but there are also ways to do have memorable experiences without having to sacrifice everything you enjoy. Here are 5 tips to help you enjoy the finer points in life whilst still clearing debt…

1.      Ask for a payrise

Have you asked before? Even if you have, we all know, if we don’t ask, then we don’t get… Why not take a chance and see if you can get paid more for what you currently do. Then you can use the salary increase to help pay off debt, whilst maintaining your current lifestyle.

2.      Get a 2^nd job

If you’re not successful when asking for a payrise, why not get a second job to supplement your income. It doesn’t need to be a huge commitment. Perhaps you could be a home tutor a couple of nights a week. Or even try some freelance writing. Whatever your skill, with enough Googling, you are bound to find something to suit your skills set.

3.      Find cheaper ways of pampering yourself

You still need to look good right? Even if you’re asking for a payrise or interviewing for a second job, you want to know that you look your best when you are doing this. These days, there are so many websites offering beauty vouchers, so why not take a look on a site such as Groupon or other daily-offer sites and see what you can get.

4.      Cut corners with your shopping

Whether it’s your weekly food shop, DIY purchase for home improvements or a dress for a wedding, again, there are countless shopping vouchers to be found online. You need to pay attention to dates though, as these deals do not stay around for long but new ones are constantly appearing, so it’s nearly always a safe bet.

5.      Consolidate your debts

Paying several different loans and credit cards can get very confusing. Why not consolidate all of your debts in to one payment on the same day each month? Being organised this way will give you peace of mind and let you concentrate on the things you really care about. Ensure you find a reputable lender when doing this, however, and check APRs and fees. You need to ensure you won’t end up paying back more than you already owe!

There are two primary kinds of loans available on the market today – secured, and unsecured loans. Secured loans are loans in which some type of collateral is used to hold the loan; usually this is the borrower’s home, or perhaps a car in the case of hire purchase. If the borrower defaults on the loan, the lender has the option of taking possession of the collateral. Unsecured loans, on the other hand, do not require collateral to obtain.

Secured Loan Limits and Lenders

In most cases, lenders limit the amount of unsecured loans to between £15,000 and £20,000. Unsecured loans can be used for any reason, from taking the vacation of your dreams to having a medical procedure done, to starting a new business to consolidating debt. Although the lender may ask you what you plan on doing with the money on the loan application, really it is up to you how you use the money once you receive it.

Common lenders for unsecured loans are banks, credit unions, online loan companies and specialist lenders. Generally, lenders want you to have good to excellent credit before they will lend you money for an unsecured loan. You must also be able to demonstrate that you are gainfully employed and can afford the loan payments.

Online lenders often offer better terms than banks or credit unions. Additionally, the application process is often very fast and easy. Generally, you only need to fill out an online application and provide details such as your employment information, the amount of money you want to borrow and what you intend to do with the money. In some cases, you will need to fax a copy of your most recent pay slip to the lender. With online lenders, applications are often approved within 24-48 hours and the money is transferred into your bank account right away.

Despite the ease with which online loans can be arranged, due care should be taken to avoid “Pay Day” loan companies, whatever your circumstances. With typical APR’s in the region of 2,000-8,000% it is an extortionately expensive way of obtaining a loan for longer than a few days and despite the welcoming façade such companies present, they remain dangerous traps to the unwitting.

For individuals who are self employed, it may be necessary to use a specialist lender for an unsecured loan. Specialist lenders are often more willing to work with individuals who are considered high risk, such as individuals who do not have a long credit history or whose income is less stable due to self employment. If you are self employed, you may need to supply copies of your tax returns or business accounts for the past several years to prove your income.

Smart Use of Unsecured Loans

If you decide you want to take out an unsecured loan, do not borrow more than you can afford to repay, and consider other means of raising required capital such as saving. If you fail to meet the terms of the loan, it could be detrimental to your credit history. Even late payments will have a negative impact on your credit and influence your ability to get a mortgage or car loan in the future.

Unsecured loans are often for a term of between two to 10 years and are at a fixed rate of interest. If you find yourself having problems making payments, contact your lender immediately. Lenders are often more willing to work with you to renegotiate the loan if you communicate with them openly and honestly as soon as possible.

Before taking out an unsecured loan, shop around different lenders to find the best loan terms possible. Make sure you completely understand the terms of the loan before signing the loan documents and accepting any payments. A  final precautionary tale to shopping around is that that quoted APR’s are not necessarily the rate you will receive, and applying for a loan will impact your credit rating as it will record a search, even if you later choose not to go ahead with it.

If like me, you had a vague recollection of something happening about automatic credit limit increases at some point in the recent past when you read the title of this post, you’d be right. But what was it that changed, specifically? Can you remember?

Good. It’s not just my memory that is failing in my mid-20′s old age then!

I had a letter from Barclaycard today sporting the bold headline “Important news about your Barclaycard credit limit”, which immediately filled me with a minor sense of dread, and a great deal of curiosity. Were they moving it down? Why would they do that (other than “because they can”, of course)? Not that a reduced credit limit would annoy me for any particular reason other than a feeling of them casting a minor slight on my character.

My Assumption

I didn’t think they’d be moving it up, because they weren’t allowed to any more, were they?

But it appears I was wrong; both in my assumption that they’d be reducing my credit limit and in they can’t just put up your limit randomly. The next line (in considerably smaller print I might add) quietly whispered “Good news, from 2 September 2011 your credit limit will be increased from £x,xxx to £xx,xxx.

After I had picked my jaw up off the floor, I began a Google hunt with ideas floating through my mind that they couldn’t do this. I remember Martin Lewis over at Money Saving Expert campaigning to ban just this very practice. And I further recalled, or so I thought, that he’d been successful?

So just what were Barclaycard playing at?

The Reality

Having done a lot of digging, the result (taken from a leaflet PDF published by The UK Cards Association) seems to be that I was half right. Credit Card companies can still randomly increase your credit limit if they choose, but they must notify you separately from your usual statement letter, and give you at least 30 days in which to decline the offer. This is still therefore an “opt-out” method rather than “opt-in”, so far from ideal.

Currently they can say “Hey, you… your credit limit is going up. Well done! If you don’t fancy it though, ring our premium rate number”. Who will bother to not accept it? I think I’d prefer them to write to customers and say “Hey, you… you’re eligible for a credit limit increase. If you want it, give us a shout”.

But I suppose in the grand scheme of things, this wouldn’t earn them nearly as much profit and that’s what credit card companies are all about at the end of the day.

Remember, credit card companies are not your friend! But thanks for the increase anyway.