6 Quick Tips If You Have Gone Overboard With Your Credit Card Bills
The temptation to spend is real. Thanks to credit cards, it has become incredibly convenient to make purchases. Also, their reward programs and promotional offers make it all the more alluring to buy items and indulge in luxuries that we don’t necessarily need.
While it may be okay to cross the credit limit once in a blue moon, it’s important to manage the situation carefully to avoid getting into financial trouble.
If you’re in a similar situation, here are 5 quick tips to come out of this problem:
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TogglePay The Minimum Amount Due
Ideally, you should pay the credit card balance in full every month. However, in case of a cash crunch, you should at least try to pay the minimum amount due.
Minimum amount due is a small fraction of the total bill that you are asked to pay by the lender when the complete bill amount is not immediately payable. Paying the minimum amount due would give you the following benefits:
1. You will save yourself from paying the late fee.
2. You will not be reported to credit bureau, so your credit score will remain unaffected.
Although, this is not suitable for long-term as you will still be charged interest on the unpaid amount.
Identify Your Most Expensive Credit Card
Figure out the interest rate of all the credit cards you use.
Start with repaying for the card that is charging you the highest interest rate. Then move to the card with the second-highest interest rate, and so on. This would minimize your interest charges.
Convert The Outstanding Amount Into Emis
If your credit card debt is higher than what you can repay in lumpsum, you can check with your bank and try to convert the outstanding amount into EMIs.
This will help you to maintain your score and prevent you from becoming a defaulter.
Take a Personal Loan
You could swap your credit card debt with a personal loan if the loan interest rate is lower than credit card interest rate. With digital lending platforms like Zype, you could avail personal loans in no time. This is helpful in multiple ways:
1. It could help reduce your interest cost.
2. It would help you clear all your credit card dues in one go.
3. You could choose the EMI option that is most convenient to you.
Talk To Your Bank
Being honest with your bank can come to your rescue. Based on your relationship with the bank, your repayment history and your credit score, your bank might help you in following ways:
Also Read: What is Personal Loan Repayment and Types of Loan Repayment Methods?
1. It might offer you an option to transfer outstanding balances from one credit card to another.
2. It might waive off or reduce the late repayment or over-limit fees.
3. The bank might offer you a debt consolidation loan wherein all your outstanding debts would be converted into a single personal loan with interest rates lower than that of the credit card.
4. You could also negotiate the interest charges levied on your credit card.
In Conclusion
Coming out of credit card debt can have a significant positive impact on your financial and emotional well-being, and can help set you on a path towards financial stability and success.
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