Strategic investments with ample funds at the right time can helpmultiply your bank balance, in a short periodand Credit Cards equip users with the funds required. It is very likely to go overboard while usingCredit Cards and unfortunately it can land the user in debt. Lately, banks offer an option of repayment through EMIs. SBI Credit Card offers like low-interest rates on EMI repayment facility making payments easier.
Credit Card debts take time and perseverance to overcome,but with these few tips, it may get easier.
Useful Tips to Get Out Of Your Credit Card Debt
1) Begin by setting targets: Setting small and realistic targets can slowly help you crawl out of debt. Begin by paying off high-interest Credit Card debts and loans; with discipline and motivation, one can overcome multiple debts by taking one step at a time. Keeping track of your goals can help you be patient and positive while minimising Credit Card debt.
2) Keeping unwanted Credit Cards away: Out of sight is out of mind. Keep away Credit Cards that have never been used or are least used. Focus on paying off Credit Card debts rather than further increasing them. Using cash for purchases will help differentiate between actual needs and desires; it helps to keep us conscious of our expenditure and makes us think twice before splurging.
3) Categorise Credit Card debt payments: Noting down all Credit Card debts, mentioning outstanding balances, interest rates and late fee charges help in prioritising Credit Card debts and loans. Categorising in order of importance helps in clearing Credit Card debts on priority. For instance, mortgage and vehicle payments usually are high-interest rate debts and must be eliminated at the earliest.
4) Start saving up on cash and lower your monthly expenses: Revise your monthly expenditures and cut down on unnecessary splurging, spending cash only when required helps in keeping track of your purchases throughout the day and helps assess whether they were valid or not. This will help you in getting conscious before spending and will help build larger savings.
5) Make monthly budgets and stick to it: Start living as per your income, by creating monthly budgets and keeping aside money for mandatory expenses will plummet the frequency of your Credit Card use. Credit Card revolves around the concept of lending money to the user, by budgeting your needs borrowing from Credit Cards will soon come to an end.
6) Strategies and plan Credit Card debt payment: Begin by paying debts that rely on a fixed monthly income, like mortgage and vehicle loans and pay minimum dues on Credit Cards with the Lowest Interest Rates. Ensure maximum payments on Credit Cards with higher interest rates, by doing this one can shrink Credit Card debt noticeably and help you save money which in turn will help in faster repayment.
7) Snowball method: As the name suggests, this method payment of small Credit Card balances are made first,and then bigger debts are cleared, step by step. Paying off smaller debts motivates the person paying debts as it has a psychological effect of making quick progress.
Start by using savings and pay off the smallest balance Credit Card debt; this will give a sense of satisfaction and motivation to pay off more debts in increasing order of outstanding balance.
To pay for the next card debt, use the amount that was used to clear the minimum due on the smallest Credit Card to clear the next smallest outstanding balance. This helps in clearing the smaller debts and will help save the monthly payments made previously which helps in further reduction of Credit Card debt payments. This method is based on incremental due clearance which in turn helps to clear larger outstanding balance card debts, creating a snowball effect.
8)Pay more than the minimum amount due:Credit Card companies a minimum balance amount, which must be paid to avoid a late fee and interest charges on the principal amount. If only this minimum due is paid, the main debt amount remains untouched. By paying more than the minimum due to the debt amount slowly goes down and helps in quicker repayment of the debt amount.
To know how much payment is to be done above the minimum due, you must pay just enough to go beyond the interest charge into the principal amount to clear the card debt incrementally.
9) Have a word with Credit Card companies: Let the Credit Card Company be aware of your financial situation, at times companies do offer help by either lowering the interest rate or by waiving off the late fee charges. Usually, companies go the extra mile for loyal customers, mentioning about customer loyalty may aid in clearance of your Credit Card debt by the company to a certain extent. Make sure you are prepared with a complete list of documents and are aware of the interest rates you are charged on your Credit Card by the company as well as its competitors, before approaching.
10) Do not keep outstanding balance on your Credit Cards before closing them: Always clear off the outstanding balance before closing Credit Card services, this lowers your Credit Card score drastically and affects Credit Card repayment history. Always make sure to take the Credit Card closing down the request on paper, ensuring that the closing request has been made by you and not the company.
Why is SBI the Most Customer Friendly Bank?
State bank of India is one of the leading national banks in the country with competitive interest rates and loan schemes. Currently, the bank has a rate of 3.35% per month (40.2% per annum) from the transaction date and is subject to change.SBI Credit Card offers are highly competitive on shopping and travel schemes and are preferred by the masses for its easy repayment options like EMI scheme and benefits.
Conclusion
Assess all options and see which of these options of repayment suit you best. Logically, paying off Credit Card debts with higher interest helps in quicker repayment. Choose the option that suits you best. Patience and strategies help in overcoming debts. Small progress in repayment gives a sense of accomplishment and motivation to overcome the debt. Once the dues have been cleared, reassess all the Credit Cards you have and only keep the ones that are essential. Multiple Credit Cards lead to multiple bills; most people need only one to two Credit Cards. Use and choose them wisely.