Nowadays, with the increase in the use of the credit card, it has become common to contract debts with this type of payment, mainly, with all the facilities that the card offers.
This discharge is so popular that, according to a survey conducted by PWC, for 78.5% of the country’s inhabitants, the credit card is the first choice for making payments.
Access to credit is practical and making the installment of the credit card is even easier
In fact, when we look at the advantages of this modality, it is very simple to understand why it is preferred: access to credit is practical and making the installment of the credit card is even easier.
However, there is little care. The lack of complexity found for obtaining credit is the same as for acquiring debts, and we all know that credit card debt represents a headache that no one wants, especially with interest rates that can reach 332.4% per year. However, this situation often happens.
Thinking about it, we have separated essential tips to help you deal with the debt and make the installment of the credit card. Continue reading and check it out!
Default and the consumer
Those two words shouldn’t go together so often, but unfortunately, being in default is a very common situation among consumers around the world. Especially for regular credit card users, this possibility becomes more constant than usual.
To be in default, an individual must have been in arrears for more than 90 days. He is usually a person who does not plan financially and spends more than he receives.
In order to compensate for this, it prioritizes basic accounts so as not to lose essential services – such as electricity, water, telephone, among others – and leaves other expenses aside.
Most users would prefer to stop paying their credit cards than to be without the basic services mentioned, even with the high-interest rate presented. It is at this moment that the credit card installment becomes something regular in their lives.
A curious fact is that, according to Serasa Experian, most Brazilian defaulters are between 41 and 50 years old and have an income of up to two minimum wages. Second, there are young people between 18 and 25 years old.
They also say that many of these consumers do not have the knowledge to deal with their finances, however, even so, they have facilities to obtain credit to buy products and services.
So, as we can see, the fact that you don’t have the information to handle finances better can be a crucial factor in becoming a person full of debts. So, below, follow some unmissable tips to pay your credit card debt!
The 5 Tips for Paying Credit Card Debt
1. Put your expenses on paper
Now that you’ve noticed the seriousness of your problem, the first thing you need to do is find out how much money you have and how much you spend.
Start planning! Take a notebook and put your salary, with all discounts, on one side, and your periodic bills, on the other.
Subtract the amounts and find out how much you have available to pay that debt. This procedure will be essential so that you can then negotiate it with the financial institution.
Remember that this action is for your personal expenses and those of your company. So keep an eye on your organization’s health too!
2. Contact the card center
Remember that dialogue is the foundation for any relationship and, with the creditor, this is no different. In addition, the finance company also has a strong interest in paying off its debt.
Therefore, after knowing the amount available for your budget, contact your card center to talk about your interest in resolving the expense. Ideally, this is just a first contact to inform your intention.
The renegotiation process needs to be done in person, as it is very likely that the attendant will pass the first proposal, which usually means paying the minimum invoice amount, while the debt is still there, and that would only make your situation worse.
3. Renegotiate credit card debt
In this phase, you will meet the administrator and discuss the possibilities of renegotiation. Some important aspects must be considered, such as:
- installments – try to opt for fixed installments, because those that increase according to the term seem low, but, in the total sum, are more expensive. Ultimately, you will only pay the administrator’s interest;
- CET – ask for the Total Effective Cost (CET) of the debt because this way, you get to know the total value of the account. At CET, there are all interest, fees, and taxes, and you will not run the risk of accepting a proposal that is not in accordance with reality;
- proposal – do not accept the first offer if it is not suitable for you. Understand that the negotiation needs to be a favorable outcome for both parties, after all, that is the objective of an agreement.
4. Take out a loan to pay off your credit card debt
It seems somewhat incoherent to want to pay off one debt with another, but this alternative can be quite advantageous. And in this case, if it is a secured loan, it tends to provide more benefits than other modalities. In this situation, there is the option of offering a good in exchange for facilitating the release.
Among the advantages are very low-interest rates, around 1.5% and 2.6% per month, and no objection if the interested party has a dirty name. The bank feels safe to grant the loan since there is actually a guarantee.
The payment term is divided by category – if a property is offered, it can reach up to 20 years; already a vehicle, up to 5 years. In addition, the administrator can assign, in credit, 60% of the value of the house and 90% of the value of the car.
At Good Finance, you can find the types of loans with a vehicle under guarantee and loan with the property under guarantee, facilitating access to this type of credit. With all this convenience, a loan with security is a good way to get rid of debt on the card and still get good discounts.
5. Look for guidance services
Sometimes, you can continue to have a lot of difficulties to be able to deal with card expenses even after renegotiation, and you will not be able to pay for the new proposal. In this case, GFIC has a program for people who are in default.
It is called PAS (Support Program for the Super-Indebted) and is a partnership between GFIC. In this context, they guide consumers facing credit problems and also hold hearings on credit card debt negotiations.
After knowing these must-have tips for paying off card debt, how about understanding everything that happens when we make a credit card installment? Read on!