6 Tips to Get Rid of Your Credit Card Debt
The credit card is a useful tool only if used wisely. If you get into the habit of using this as your secondary source of expenditure, you are only bound to get into deep trouble. Nevertheless, every year, many fall into this trap, only to realize later the mess they have got into. Here are a few tips to get rid of the credit card loan, and live a debt-free life.
Do not take balance forward
Do not take forward each month's balance in for next month and so on. The instance you discover such an incident is happening, discontinue using your credit card immediately. Put away your credit card where you will not access or cut them up.
Spend only what you can pay off by the month end
The best way to use a credit card is to use it as an emergency fund that you know you can pay off by the month end. Do not get into the habit of minimum payment.
Look for the best offer
If you already have credit card debt and paying a hefty interest on the card, look for the best offer cards with low interest rates. Shift your debt to the card with the lowest interest and stop making any further expenditure on the new card. Discontinue the old card with higher interest rate.
Cash-in on Investments
If you have accumulated a huge loan that has started to weigh down on your income, consider paying it off in a one go or in bulk amounts by cashing in on your investments. No matter where you invest, no financial instruments will give you a return that is higher than the interest you pay on your credit card. You may even consider borrowing against your life insurance policy or bank deposits. Make sure you pay back the borrowed sum the earliest possible. In case of a life insurance policy, if you fail to pay back the borrowed sum and you die, the margin plus the interest will be deducted from your settlement amount.
Try to get a loan at zero percent
If you have a family member or friends who can lend you money to pay off your debt, nothing like it! Borrow the amount and pay off the credit card debt. The bright side is you do not pay the interest amount to the creditors. However, do not forget to repay the borrowed sum to the family or a friend who lent you. As a token of gratitude, resolve not to collect any more loan amount on your card.
Get Help
If you have explored all the alternatives and still carry a hefty loan amount on your card, seek help from service providers who facilitate debt agreements in Australia. If required they can even help you file for bankruptcy, if the need arises. However, doing that can scar your credit score in Australia for anywhere between 5 - 10 years. Therefore, see if you can get your loans consolidated or some other options such as mortgaging your property, etc.
Do not take balance forward
Do not take forward each month's balance in for next month and so on. The instance you discover such an incident is happening, discontinue using your credit card immediately. Put away your credit card where you will not access or cut them up.
Spend only what you can pay off by the month end
The best way to use a credit card is to use it as an emergency fund that you know you can pay off by the month end. Do not get into the habit of minimum payment.
Look for the best offer
If you already have credit card debt and paying a hefty interest on the card, look for the best offer cards with low interest rates. Shift your debt to the card with the lowest interest and stop making any further expenditure on the new card. Discontinue the old card with higher interest rate.
Cash-in on Investments
If you have accumulated a huge loan that has started to weigh down on your income, consider paying it off in a one go or in bulk amounts by cashing in on your investments. No matter where you invest, no financial instruments will give you a return that is higher than the interest you pay on your credit card. You may even consider borrowing against your life insurance policy or bank deposits. Make sure you pay back the borrowed sum the earliest possible. In case of a life insurance policy, if you fail to pay back the borrowed sum and you die, the margin plus the interest will be deducted from your settlement amount.
Try to get a loan at zero percent
If you have a family member or friends who can lend you money to pay off your debt, nothing like it! Borrow the amount and pay off the credit card debt. The bright side is you do not pay the interest amount to the creditors. However, do not forget to repay the borrowed sum to the family or a friend who lent you. As a token of gratitude, resolve not to collect any more loan amount on your card.
Get Help
If you have explored all the alternatives and still carry a hefty loan amount on your card, seek help from service providers who facilitate debt agreements in Australia. If required they can even help you file for bankruptcy, if the need arises. However, doing that can scar your credit score in Australia for anywhere between 5 - 10 years. Therefore, see if you can get your loans consolidated or some other options such as mortgaging your property, etc.
