Expenses and small purchases made using your credit card could add up. Especially when left unpaid over months. It will fast become a debt mountain. It may be that you have used the credit card for a real emergency need.
Regardless of your reason, defaulting on credit card debt is a fast way of letting your debt snowball. That is particularly the case for individuals who have maxed out their credit card limits.
To help you improve your financial status fast. At the same time be able to grow contingency funds for your future needs. To get this underway, you have to pay back the money you owe to various lenders.
One ideal way for you to settle credit card debt can be by focusing on card balances. When you are seeking quick ways to decrease your credit card debt. At the same time be able to mend your credit score. You could try a number of the following techniques.
By working with these 5 tips. You will be able to get rid of debt fast as you possibly can.
Pick A Repayment Strategy
To help reduce the outstanding credit card debt quickly. You could consider adopting any of these methods. You could start by paying off the highest-interest credit cards first. Alternatively, you could settle credit cards with the lowest remaining balance first. If you are considering the first strategy.
You will need to rank credit cards starting with high to low interests. Then first tackle the credit card that has the highest rates. Make sure that you pay the minimum amount due. That is for all the remaining cards. You can then use any extra funds to repay card balances that carry maximum interest.
When it comes to the second strategy. You should reverse their order, starting with low to high-interest credit cards. Although you will keep on paying the minimum balance for all the other cards.
Make sure that you settle the credit card debt with the lowest outstanding balance. This you need to pay in full using any extra funds you get. Having debt cleared off on a single card. It will motivate you to repay the remaining cards as well.
Calculate Interests, Balances, And Annual Fees
This will help you know the debt amount you are working with. You will also be able to establish working strategy. But before you come up with a repayment scheme. Ensure that you check balances, card interests and the minimum amount due. This is crucial especially for accumulated balances that are in 4 or 5 figures.
Once you have noted these numbers on a paper or an excel sheet. Your next step will reveal itself. If you have been making annual fees payments on your card. You could request your moneylender to waive the fee off. You then can pay off the outstanding debt using the cash saved on the annual fees.
Do 2-3 Minimum Payments Each Month
This strategy of repayment mentioned above will work only if you have enough funds. You may not always have extra cash or even additional income. Under such a predicament, you can pick 2 to 3 credit cards. These cards should all have a large outstanding balance. Their rates of interest should be high for the cards.
Remember to pay the minimum due for these cards each month without fail. This will help reduce the overall balance. It will also save you some money on interest. And above all, it will help improves your credit score.
Use Cash For Your Purchases
There is a high likelihood that you will continue making purchases with plastic. That is unless you have maxed out on your credit cards. Using your card will only further add your debt pile. However, If you seriously want to tackle your debts head-on. Make sure that you put the cards in dormant mode.
Ensure that you use cash to make all your purchases as well as payments. This you can do until the total debt due reduces to about ¼ of the initial amount. By making cash purchases, you will be pushed into considering your purchases carefully before you buy them.
Negotiate To Have Lower Rates For Credit Card Debts
This is a fast yet effective strategy to help you to save on paying interests. This will be on any current debt as well as future purchases. The important thing to note is that you negotiate for lower interest rates. Contact your moneylender, and make a polite request to them. Be sure to explain your financial situation to your lender. Even if you are worried that the request will get rejected.
Realize that most credit card institutions prefer to have payments on time. Instead of a borrower going bankrupt. If you are a long-term client, they will more likely shave off few points from the rates. Although the rate change might seem negligible. In the end, you will make savings. Or you will avoid repaying several hundred dollars on the high balances.
What To Do After Settling Your Credit Card Debts
Once you repay all your credit card debts up to the last Singaporean dollar. You will need to be careful not to get into a similar situation again.
When you want to make important purchases or you have an emergency situation. It maybe is a good idea to simply get a personal loan issued by moneylenders. The personal loans attract lower rates of interest that are capped at 4 percent.
In Singapore settling credit card debt is something that many people have to deal with. This is because making use of personal loans is essential. For them to lead comfortable lives in Singapore. But, when your debts get out of control and become overwhelming to handle. You will seriously have to repay them fast.
Get a repayment strategy, avoid using the cards, negotiate lower rates on the cards etc. One of these strategies will help you tackle your debt head-on. Thus, in the end, you will reduce significantly your card debt.