How To Deal With Credit Card Debt?

Introduction

Over the past few years, the use credit cards increased manifold. The use of the credit card made the plastic currency popular as well as acceptable universally. The usage pattern of the credit cards varies from user to user. For some credit card is a convenient way of purchasing goods and services for personal consumption. While some use the business credit cards in order to fund their business. Credit cards earn you reward points against every purchase which can be redeemed in a number of ways. Use of credit cards above the threshold limit imposed by the income may cause financial loss and debt to the user. However, user can manage debt using certain tips and tricks.

Address One Card At A Time

The balance between the payment and repayment of the credit card bills when left unbalanced create debt like situations for the user. The imbalance in the cycle of payment and repayment is generally observed in the users having multiple credit cards. Different cards are specialized in different kind of rewards. Due to this reason, user pays different bills using different cards to maximize the rewards. At the time of repayment if the user is short of cash to manage all the card bills the state of confusion and anxiety, boost the crisis.

User is able to decide how to repay the bills as all the credit card companies will charge the penalty if the deadline is not met. The best way is to deal with one card at a time. Start from the smallest bill and incline towards the highest one. Pay whole bill amount one by one and coming to an end pay off the minimum compulsory bill amount. In some cases, the credit cards bills can be prioritized base on their usage pattern. The basic purpose of doing this is to boost the credit history.

Request Reduction In Interest Rate

The annual interest rate charged by the various credit card companies boost the probability of debts in the credit card users. The interest rate is usually less or equal to twenty percent and is sufficient to cause enough financial loss to the user. Most of the credit card companies accept the request made by their customers, even in the most informal way in order to reduce the interest rate. The banks check the credit score and the term of association of the user in order to evaluate the percentage relief in the interest rate.

The user can easily avail a relaxation of one to two percent by a humble request. If user is in doubt about his credit history and term of association with the company, he may use the diplomatic way. The customer may quote the name of the other credit card companies offering a better interest rate option. Predicting a change in mind the credit card company will provide the relaxation in interest rate instantly. A percentage change of one or two is enough to save enough money of the user and can prevent the chances of debt.

Use Other Cards For Balance Transfer

In case you find it difficult to manage funds for the repayment of the credit card bills use the balance transfer option. Under this offer user can make use of the other cards in order to pay the credit card bills of other companies and this is termed as balance transfer. Some credit card companies offer balance transfer as the main feature of their service and usually provide zero interest rate on balance transfer. However, this option is available for a limited time.

The user can decide better which card to use for the balance transfer facility by comparing their interest rate. Usually, the interest rate on the credit cards for balance transfer is much lower as compared to the penalty or fees if you default the deadline. User must plan the repayment of the balance transfer amount in order to prevent the vicious circle of this provision. Balance transfer done at a higher interest rate is much better as compared to a payday loan.

Control Expenses And Begin Alternate Earning

One of the best ways to deal with credit card debt is to control your expenses in order to save enough and pay the bills as early as possible. One should list down the important and unimportant expenses in order to manage them. Avoid clubbing and parties if they prevent you from paying the bills. The user can search for part time job or freelancing options in order to earn extra money and pay the debts as early as possible.

In order to implement both the things the user need to manage the time. Instead of feeling stressed about the failure in repayment, look for alternate options. Request the current employer in order to provide overtime work opportunities and earn more than usual if you find it difficult to find and manage new work opportunities. Set daily targets to save enough in order to ensure an escape from the credit card debt.

Conclusion

There are a number of options available to manage the credit card bills and avoid being trapped in the credit card debt. If due to an emergency or other circumstances, you trap in the credit card debt there are a number of ways to escape from the situation. Try to control your expenses and save enough to manage the bills. Search for alternate earing opportunities or request the current employer to provide overtime opportunity. A 0% balance transfer can also provide a temporary relief from the debt. Manage your time and expenses well in order to prevent debts.

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