Most people fear being delinquent when they settle credit card debts. Fortunately, there are quick tips on being successful in it.
It will drag you for a long time with sleepless nights. Unfortunately, however, some people fall into spiralling debts for various personal reasons.
You could have used your credit card for an actual emergency need. But, whatever the reason, failing to pay your credit card is an easy way to slip into snowballing debt. It is especially the case if you max out your credit card limits.
How do you deal with this dilemma?
Ignoring your bills and the bank’s calls will never be part of the list. So here are the five best ways to settle credit card debts finally.
Of course, the best way to settle any debt is to pay the outstanding balance in full. Unfortunately, some people mistake credit cards for free cash. They keep swiping until they reach the credit limit. Then, they will just pay the minimum required payment.
Take note that banks boast of their low required payments per due date. But, it is only to assure you that there is no late payment fee charged. However, the interest charge still stands.
Be reminded that even if you do not have any late payment fee, you will still be charged with high-interest rates as long as you don’t settle the balance. So pay the due amount on time. It helps you avoid the charges of interest. This option is best if your monthly income is still enough to pay off the debt.
Choose the lesser evil.
As said above, it is best to settle the whole amount in full as early as possible. On the other hand, if you do not have enough cash to settle the bill, pay at least the minimum amount.
Making the minimum amount helps you avoid the late payment fee. But, the interest rate will still apply. Most credit cards have a minimum repayment of $50 or 3% of the outstanding loan. So, it is best to ask the bank about it.
While the minimum repayment may be helpful, this is only a short-term solution. Do not make this a habit. Or soon, you’ll be in very deep debt.
Also, if you can only pay the minimum amount of your credit card balance, it is best not to use the card. You are already having problems paying your bill. Why would you add more?
Refrain from using your credit card while still repaying the balance.
There are personal loans that have a lower interest rate than credit cards. Use a personal loan to pay the credit card debt. You can acquire these personal loans from private money lenders.
Personal loans are usually multi-purpose. You can use it for your various needs. For example, spend it on purchasing stuff and paying your other debts.
Personal loans have fixed repayments. But you can settle it at an earlier date. So check if there is a prepayment penalty. This way, you can pay the loan earlier without extra charges.
If you have multiple credit card debts, it is better to have a debt consolidation plan.
The balance transfer will require you to get a new credit card. But a debt consolidation plan works in other ways. For example, some banks offer debt consolidation even if you do not have a new credit card. However, you must have a savings account with them.
Luckily, legal money lenders also offer this. Your chosen financial institution will pay off your multiple credit card debts. All you have to do is keep track of one loan with a single interest rate.
The option is highly advisable if you want to settle credit card debts that are already 12 times your monthly income.
The balance transfer pays your credit card debt with a low or zero rate interest loan. Most banks offer this in Singapore.
If you have uncontrollable credit card debt in a bank, you can apply for a credit card in another bank. Then, use the new credit card to pay your old credit card debts.
Balance transfers usually have zero interest rates for the first six months.
It will give you some breathing time to find more ways to pay for the debt. However, do not use the new credit card until you settle your debt. It keeps you from making new debts. In addition, the balance transfer process might take three weeks or more.
If you have a couple of credit card debts, it is best to form a plan on how to settle them. And once you have paid them off up to the single Singaporean dollar, you must be cautious not to be in that situation again.
Do you need to make a necessary purchase? Did you get yourself into an emergency? Then, it is best to get a personal loan. Personal loans have lower interest rates. Legit money lenders in Singapore cap it at 4%.