How Can I Quickly Get Rid of Credit Card Debt?
The section of minimum due payment on your card statement seems like an amazing idea. All you need to do is make payment of a small amount and you can skip paying the entire bill (however, for some time).
Those who have had credit cards for a long time know that the card debt would come back to bite them, if not paid on time. Moreover, trying to find out the ways of getting out of this debt is not a cakewalk.
There are a lot of reasons why you might have ended up falling under the burden of a high-interest credit card debt. Probably you became unemployed, endured a disease, or made an unexpected huge ticket purchase. But, whatever the reason is, clearing off this debt burden must be your financial priority.
In order to reduce and finally eliminate all that you owe, you need to have an organized plan. Here are some ways that will help you in getting rid of your credit card debt quickly.
Request the Creditor to Charge Lower Rates of Interest
At times, things as easy as contacting the card issuer can help you in getting a lower interest rate on credit cards in Dubai. However, you must have a good credit score and must be long-term customer, only then the provider might accept your request.
The provider may reduce a percentage or two from your prevailing interest rate, and you may end up saving considerable amounts annually.
There is also a trick, which works quite fine- If any of the provider’s competitor has offered you a lower rate, you can inform the customer service executive about the same. There is a possibility that in order to avoid losing its customer to the competitor, the provider matches the offer.
Go for a Personal Loan to Clear the Debt
Ideally, you must make full payment of your credit card to become debt-free. However, if you are unable to do that, you can consider borrowing funds for the same.
You can opt for a personal loan in UAE for getting rid of your credit card debt. The rate of interest charged on a personal loan is way less than the rate of interest charged on credit cards. Hence, you can escape from the burden of your card debt and save a few pennies too.
Start with One Card at a Time
In case you have outstanding balances on more than one credit card, wiping out the debts becomes a long slog. But, as they say, nothing is impossible in this world. If you have more than one card debt, then completely paying off one card first is a good option.
For this purpose, first, focus on the card that has the lowest balance. In the meantime, keep paying the minimum amount on the other cards.
However, if you want to pay less in terms of interest, then first tackling the card with the highest interest rate is a tried and tested method. This way, you don’t have to bear the accumulated interest amount, which will be higher for this card.
Carefully Transferring your Balance
Moving your outstanding balance from one credit card with a high rate of interest to another card that has a substantially lower rate sounds like a good option. Well, it potentially is a good move; you may end up saving a lot of your hard-earned dirhams.
However, it is important to remain cautious. You must make such balance transfer only when you are committed to repaying the debt while there is a low to no rate of interest window in the initial days. You also need to ensure that you make payments well on time.
Late payments may lead to a rise in the rates, sometimes higher than what you got yourself out from. Another thing that you must keep in mind is- avoid using the new card for making purchases. This is because low rate of interest may not apply to your purchases. Furthermore, you may also have to pay a balance transfer charge, which is a certain percentage of the amount transferred.
Making 2 Minimum Payments in Every Month
Usually, the card providers charge a rate of interest on your outstanding balance on a daily basis. Hence, the sooner you repay the amount, the quicker would be the reduction of your average balance. And this reduction will lead to fewer dirhams that you pay ultimately as interest.
In case you have a tight budget, make sure you at least pay the minimum amount due every month, then try and pay the minimum amount again after two weeks. Continue making payment of the minimum amount due two times in one month, until you don’t pay off your debt entirely.
In a Nutshell!
Credit cards are a plastic blessing. However, one mistake and they turn into a nightmare. And, the most common mistake that people tend to do with these cards is accumulating the debt and finally falling under its burden. Credit card providers charge high rates of interest making things worse for you. Read the above-mentioned strategies to know how you can save yourself from these debts quickly and conveniently.