The plastic card is extremely useful when it comes to meet your emergency expenses and other possible expenses in our everyday life. It is a kind of payment card issued by banks or credit card companies that contains credits that can used to pay for various services and products. You need return the amount received as credit every month on scheduled dates scheduled by your bank/ credit card provider. But if you fail to pay your credit card bills on time, you may be weighed down by credit card debt.
It is a type of unsecured liability incurred by credit card users for using credit cards. To put it more clearly - every time you use your credit card to purchase something, it creates a debt for you. Credit cards debt don't incur interest provided you pay your credit card bills on time or within the grace offered by your credit card provider. If a credit cardholder is capable of paying off the entire amount of credit card balance every month on scheduled date, he/she is not considered to have credit card debt.
The debt incurred from credit card usage is widespread in Singapore. The Singaporeans extensively use credit cards to pay for various activities starting from paying travel expenses to purchase groceries. And many of the users fail to repay their credit card bills within grace periods that put them into further debt. Because when you fail to pay your bills on time, credit card providers charge heavy interest charges on your existing balance, increasing your debt further. Hence, credit card debt is one of the worst types of debt.
Now, how do you keep your credit card debt under control or get rid of debt incurred from credit cards. Listed below are some of the tips that would definitely help you control your credit card debt:
Make it a habit to pay your credit cards bill every month in full within the credit card grace period allotted to you. You should not treat credit cards as personal loans that you can pay in installments. Instead, credit cards serve as a mode of cashless payment.
If you are using too many credit cards and have balance on multiple credit cards, first pay off the amount lying in the highest interest rate card. It would help you reduce your debt.
Are you a kind of person who spends lavishly or swipe your credit card just like that. If yes, you should keep a check on your spending habit. Make it a habit to pay in cash and you will see you have saved a lot. And also, if you are already into credit card debt and trying to pay it off, it’s advisable you stop using your credit card. Otherwise, you will neck deep in debt.
Credit card balance transfer can also help you reduce your existing debt. You can transfer balance from a credit with high interest to one with a lower interest charges. Some banks may ask you to pay balance transfer fees. Inquire about it - if your new provider charges balance transfer fees or not, and if yes, know how much you have to pay as balance transfer fee.
It may happen that you are not in a position to pay off the entire balance, but you can still afford to pay the minimum payment charged by your credit card provider. If you fail to make the minimum payment, it will incur additional debt in the form of heavy interest charges. Each time you make a payment, your average daily balance gets reduced and it would help you pay lower interest charges and be debt free bit by bit.
You can also try peer to peer lending to pay off your credit card debts. Peer-to-peer lending refers to the process of lending money to peers without maintaining the traditional financial rules, it usually comes with fixed and reduced interest rates.
You can also opt for a personal loan and pay off your entire credit card debt in one go. The personal loan can repaid in installments, and it usually charges lower interest rates compared to interest rates charged on credit card delayed payments.
Keep in touch with your bank. Don’t avoid phone call or letters sent by your bank or credit card provider in this regard. In fact, you can contact your credit card provider/bank and request them to negotiate on your interest rates. Also you can take the help of a credit counselor who can work out a customized repayment scheme between you and your credit card provider.
Try out the above-mentioned tips. Definitely, you would be able to curb your existing credit card debt in Singapore.