6 Ways to Smoothly Tackle Your Credit Card Debt

A credit card is convenient to make a purchase as you do not need to experience the hassle of carrying cash. You can even earn rewards that help increase your credit points. Unfortunately, credit card holders lose track of purchases they make through it unless a bill is generated and they eventually figure out that they have exhausted its limit.

You will have a grace period to settle your balance in full. You do not get into trouble if you pay off your balance in full, but the problem starts when you fail to do so. Your credit card provider will charge interest on a per-day basis. As a result, your debt will steeply rise. The more you delay your credit card payment, the more interest you will pay.

Here are the ways to tackle your credit card debt smoothly

·         Stop using your credit card

Because credit card debt can cost you a lot of interest, it is vital to clear it as soon as possible. The first rule for the settlement of your debt is not to use your credit card any more.

·         Freeze your credit card if you cannot resist your temptation.

·         Make sure you use cash for all your transactions.

·         Remove your credit card details from all online transactions.

You will have to stick to the aforementioned rules if you do not want to add to your credit card debt.

·         Avoid using other loans

Your credit history may have already been compromised because of a high credit card balance. So, now your chances of getting a loan at lower interest rates are very low. “In case you come across some emergency, your safety nest can only protect you,” said the financial advisor of MyLoansClick. “It does not make sense to take out urgent loans for bad credit Ireland to meet unexpected expenses. They will only add a heavy burden to your pocket.”

·         Create a repayment plan

“First off, you should create a budget,” said Joe Smith, the financial advisor of MYLoansClick. “A budget will help you know how much you are left with after meeting your monthly expenses.”  “If possible, you should live off a bare-bone budget. It will help meet your essential expenses only. It will help free up some cash to be utilised to pay off your credit card debt,” he further added.

There are various budgeting methods. Choose the one that suits your financial situation. “Use a budgeting app so you do not need to record all expenses manually. All transactions will be in one place so that you will have better clarity of your finances,” said Joe.

·         Talk to your credit card provider

Discuss the repayment plans with your credit card provider. They are more likely to accept minimum payments if you cannot pay it off in one go. “It can help protect your credit score, but interest will keep accruing on your unpaid credit card balance,” said Joe. “You should always try to pay more than the minimum payments to get out of the debt faster.” Here are some ways you can consider to make higher payments.

·         You should cut back on your discretionary expenses.

·         Use tax credits and other benefits to pay off your debt.

·         Unexpected windfalls should be utilised entirely for card payments.

·         Any incentives you receive from your employer can be applied to the account settlement.

·         Use monetary gifts.

You can also negotiate a lower interest rate with your credit card provider. Make sure you give them an accurate picture of your finances. They will undoubtedly help you when you are honest.

·         Consolidate your debt

Consolidating can prove to be more affordable when you have high-interest debts. Lenders typically agree to consolidate when you have a good credit rating. “If you suspect that you will fall behind on the payment, you should immediately talk to your lender,” said the financial advisor. “However, most lenders will not let you consolidate credit card debts with other high-interest debts like small loans Ireland and bad credit loans.”

You can use balance transfer credit cards. It allows you to transfer your high-interest balance at a low balance transfer rate. “You can save a lot of money by balance transfer,” said the advisor. “However, you will be charged fees up to 3 to 5%.”

You can also sign up for a 0% balance transfer. This allows you to pay off your credit card balance without interest in a limited time period. Do proper research before choosing any options to clear your debt faster.

·         Use your home equity

You can use the equity of your house if you want to settle your accounts in one go. “Make sure that you will still have some equity to renovate your house or to meet any other big expenses in the future.”

A home equity line of credit is also an option. It is similar to a credit card. You are free to borrow money based on the limit you are offered. You will pay only interest on the amount you use. The line of credit carries lower interest rates than a credit card, so you will save money in interest.

The final word

Credit card debt is very expensive. Interest is charged by the day, so you will soon be buried under debt. You should use your credit card smartly.

Make sure you keep a record of all purchases you make through your credit card. It will help you know how much money you have already spent. Set aside the money equivalent to the purchase cost to pay off your credit card bills smoothly. In case you have exhausted your credit card balance, talk to your lender to seek any help from them.

A careless use of a credit card can throw you into a debt spiral. You should always use them for big purchases and cash for daily expenses like groceries, rent, etc.

 

Description: You can settle your credit card debt faster by using a balance transfer and a home equity line of credit and paying more than a minimum repayment.

 

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