Credit cards have many advantages when put to good use. But not a few are even trapped in debt because they are unable to pay bills. The reasons are quite diverse, it could be due to financial slumps, too often pay minimum bills or also uncontrolled shopping habits.
Paying off the accumulated debt is not as easy as turning the palm of the hand. It takes hard work to collect the money and the time may be quite long. If the usual way is not to make credit card debt paid off, then you need to change it and do other ways.
Summarized from various sources, here are some alternative ways to pay off credit card debt that can be practiced directly. Who knows, this new way can speed you up to pay off debt.
Use personal savings
You certainly have personal savings, right? Take some of the money in a savings book, then pay off your credit card debt. If the amount of savings is greater than the amount of debt, make payment in full so that the debt is paid off immediately. But if not, just pay in installments two or three times until the debt is paid off.
There really is a bad feeling when you have to pay off debt with personal savings. But alas, rather than more debt piling up, it’s better to just pay it off. After there is no debt, then you can start saving again to replace the amount of savings that have already been used.
Sell part of the investment
If savings are not enough because the amount of debt is too much, do not hesitate to sell some of the assets invested. For example, houses, branded goods, cars, gold bars, or deposits in the bank. The disbursed money is expected to be able to pay off debt until it is paid off.
Choose investments that have the highest selling value to cover all debts. Avoid selling all investments owned. Keep leaving a few investments as assets to guarantee future lives.
Take advantage of the ‘refinancing’ facility
Refinancing is actually almost the same as the whole cover system. However, this facility is considered efficient enough to pay off all debts. This is because the proposed loan sources only focus on one source so that the repayment process will become easier.
Try to compare if you have to borrow from several banks at once, then the repayment process tends to be more complicated. Not to mention the different potential interest rates that will increase the amount of debt that must be paid to creditors.
Have your friends, family or coworkers ever owe you money? Now it’s time to collect all the receivables, then allocate the money to pay the debt. Of course, there will be obstacles encountered when wanting to collect receivables. The potential for uncollectible receivables is very large if the collection is unplanned. Whatever the amount obtained later, at least the money can be used to repay credit card debt.
Submit a loan to the bank
In order for a loan to be approved quickly, it is better to apply to a different bank than the credit card issuing bank. The bank may be tracking financial conditions over the past few months. But as long as the loan amount is reasonable or does not exceed the amount of savings held, the loan will definitely be approved.
To avoid financial burdens, you should choose a bank that provides loans with low-interest rates. Compare two or three banks at once to get the best loan alternative for your needs.
Stop using credit cards
For the time being, stop using credit cards until all debts are paid off. Not without purpose, this is done to prevent the emergence of new debt that will further destroy the financial condition. Especially for those of you who can not be separated from this magic card.
The practice is indeed not easy, but if it is lived with pleasure it will definitely feel light and ordinary. Moreover only for some time to come. After the debt is paid off, you can go back to using a credit card for transactions, but with wiser use.
The Right Way to Pay Off Credit Card Debts
Calculate total debt
Before paying credit card installments, you should first calculate the total debt available. If you have more than one credit card, accumulate debt from all credit cards. The calculation is not only the principal debt, but must include interest, administrative fees, and annual credit card fees.
After knowing the total debt, you can estimate the appropriate salary allocation to pay off installments every month. Thus, debt payments will be far from the word bad.
Choose low-interest ones
For those who want to borrow money from banks, cooperatives, or other supply agencies, you should pay attention to the interest rates offered. Choose those that offer the lowest interest rates so that the interest expense paid every month does not hamper the debt repayment process.
Before choosing an institution providing funds, it is better to compare the loan interest first. Then, compare the mechanism and payment term.
Pay installments in an orderly manner
Installments that are charged to you should be paid in an orderly manner, that is, every month. Avoid paying the minimum bill because it can cause debt to pile up. In addition, the period of debt repayment will also be hampered.
As anticipation, try to make payments using the auto-debit system. When you receive a salary, the salary will be allocated directly to repay debt. Thus, debt payments are far more orderly.
Avoid Overuse of Credit Cards
The accumulation of credit card debt cannot be separated from the mechanism of its improper use. If the user is considered too excessive, reduce it to avoid the emergence of new debts. Use a credit card at certain times, i.e. at the right time and place.