Having a credit card is one thing but not using it responsibly can create an overwhelming situation for you. Like a coin has two sides, so do credit cards. You get both advantages and disadvantages from owning a credit card. One of the biggest disadvantages that you can face is the debt trap. If you frequently fail to repay the credit card dues then you are more likely to end up in a debt trap. If you are already facing such situations then you have reached the right page. In this article, we have covered a few tips that you can use to pay off your credit card debt. Keep reading to kick start your research.
- Make note of all your debts: List down all of your debts as they require immediate attention. Start with the high-interest debts and then move towards the debts that have a low-interest rate. Bigger to smaller right down all of your debts and make a plan to pay them so that you can improve your credit score as well as your credibility.
- Pay the higher debts first: After prioritizing the debts pay the ones which are higher so that in the end you don’t feel burdened and you can easily pay off the smaller debts. Paying the higher debts also gives you a sense of achieving a milestone that keeps you on track with repayment of other debts too.
- Consolidate your debts into one debt: If you feel that it is easier to pay a consolidated debt than to pay each one separately. Then you can take up a personal loan with a low-interest rate to pay all the debts and then keep paying the principal loan amount along with the interest rate. In doing so you will only have one debt and it makes it easier for you as well to remember the repayment dates.
- Convert into EMIs: You can also convert the big debts into smaller EMIs then you will easily pay back your debts. After paying back the big debts you can also pay the smaller debts by converting them into the EMIs if you feel the need to.
- Taking a credit card with low-interest rates: Try to take a credit card with low-interest rates as it will help you in saving a lot of money. You won’t end up in a debt trap as well. If this credit card provides you the facility to balance transfer then you can pay the other credit card due amount with the low APR credit card. Make sure that the processing fee of the balance transfer is not higher than the interest rate on the first credit card.
- Paying your bills regularly: This is a crucial step that you need to adhere to. If you don’t want to end up in a debt trap then you need to keep your dues clear all the time. You can do so by registering for the auto-debit services and your due amount will be deducted from your account every month. You do not have to remember the due dates with this facility. And this will also be going to help you with your credit score.
A credit card can either be your sweetest friend or the biggest enemy you’ve ever imagined. If you use your credit card wisely then you can reap all the fruits that it has to offer. But in other circumstances, you could go bankrupt. Use the above-mentioned tips to pay all your debts in order to build a good standing account.
Additional Reading – Hidden credit card charges You must be aware of