Credit cards were made to fulfil the credit needs of people at a time of urgency; it serves as a solution by making payment on our behalf, and a bill is paid later on a basis by the holder.
Many people often ignore the fact that credit cards are a solution only if used smartly; negligent use of credit cards often brings holders into trouble with a huge bill to pay off.
If you are reading this and hold a credit card, make sure you responsibly use it and remember the due date of paying bills; if not paid on time, there are chances that you may get into credit card debt.
Credit card debt is nothing but the unpaid amount that you have transacted using your card and hasn’t paid to date; in addition to the late fee and penalties, the due bill slightly increases and degrades your credit score to a greater extent. Due to a poor CIBIL score, you may not get your loan approved. Thus it is advised to follow the best advice for cleaning credit card debt which we are about to share! Stay connected.
Pay off the High-cost debt first.
Expensive credit carries a high rate of interest with it; by paying the big loan first, one can save a lot of money and decrease the overall burden of debt. Thus, never delay big loans; always pay them first. Then start repaying other debts in decreasing order and save the interest amount on overall costs.
Adopt a habit of paying credit card bills on time and set a reminder 2 days prior to the due date; one can also take the help of mobile applications for getting reminders.
Convert outstanding Bills into easy EMIs
If you have too much of a bill to pay and you are out of cash and other in-hand monetary sources, then its better to visit your nearest branch and ask for the process to convert credit card bills to EMI; banks will decide a repayment tenure and charge a nominal rate of interest, the EMI amount will directly deduct from your bank account on the date given.
Avoid using Credit cards if you can’t afford it with a Debit card.
The majority of credit card holders make purchases of the amount that they actually don’t have. Still, their banks have given them a limit, so they take advantage of this thing and buy things that are costly and spend on lavish things without a surety whether they will have that money or not at the time of bill payment.
Most of the holders are in credit card debt only due to the big purchases and later getting failed at the time of repayment, so it's better to check your debit card balance before making credit card payments.
Pay more than Minimum amount.
Whenever you are repaying your debts, be sure to save interest amount by paying more than needed; If you are the one who pays more than the minimum amount, you can easily settle the debt earlier than ever along with the interest rate. If taking loans, always check the terms and conditions and determine whether the prepayment or additional charges may apply or not.
Track your payables and adopt habit of paying bills timely
Many people have problems managing their finances; they get default in paying credit card bills due to insufficient funds; hence it is advised to keep track of your payables, keep a note of your money and consider where you are spending; also, analyse whether it is worth spending or not. Never ignore due dates and pay bills on time.
Habits play a crucial role in our lifestyle, don’t make unnecessary purchases and avoid making credit cards as your habit.
Create a Budget and Stick to It
If your credit card debt has increased too much, then it's high time to create a budget; whatever salary/income you receive, start dividing it into parts like spending, saving etc. Most importantly, keep your outstanding credit card bills as the top priority. Also, make sure you stay away from luxury and unnecessary purchases.
Avoid multiple credit cards.
If you hold more than one credit card, it will leave you in multiple debts; it will be better if you keep one single credit card to avail long term credit benefits.
Even if your monthly income increases, try to save the money rather than spend it on luxury and unnecessary items.
Closing statements
Financial Institutions issue credit cards to individuals identifying the increasing need for credit in society, but as per the general rule, every particular thing has both advantages and disadvantages. Thus irresponsible usage of credit cards brings credit card debt, which brings immense problems such as late fees and penalties; Most importantly, Credit card debts and due bills degrade the credit score of the individual, which makes it immensely difficult to get loans in future; addressing this issue, we have examined 7 guiding ways to clean credit card debt which one can follow to uplift their CIBIL score.
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What is the best advice for cleaning credit card debt: Frequently Asked Questions
Q.1 Can I ignore credit card debt?
Ignoring credit card debt is the worst idea; you will face long-term losses like disapproval from banks when applying for loans, hefty charges, increasing penalties etc.
Q.2 Do banks take legal action against credit card defaulters?
Legal actions are taken when a person defaults in repaying credit card bills.
Q.3 What are RBI guidelines for credit card defaulters?
As per RBI, banks must issue a written notice to every credit card defaulter before starting legal proceedings against them.
Q.4 How to remove a name from the RBI defaulter list?
Either pay off full credit card debt or go for a court settlement.
It helps you to pay all your bills easily if you have hard times in your cash.
With so many obligations that you need to do in your life, circumstances come that no matter how much you pay attention, you can still have credit card debt.
Just remember, that only you can find a way from this problematic situation, so, for you to avoid these difficulties, learn these things that you need to know about credit card debt.
You can put as much money that you want for your card and focus on using it responsibly which you can boost your credit card score with the highest utilization rate.
It is better to draw your attention to one card that you can do the tasks accordingly rather than having a lot of burdens in paying many credit cards debt.
Another is to take a debt management plan which is excellent assistance that you will not lose your track in your bills or when you forget to pay on time.
It is very easy to succumb to panic, when confronted with credit card debt (or any kind of debt, for that matter).It takes some measure of financial acumen to survive such an emergency.
One must ascertain that a professional counselor is not needed.
Only then should one go DIY mode.
Credit card interest rates are much higher than other types of debt, such as mortgages.
The average credit card interest rate is around 16%, with the average interest rate for a borrower with bad credit an even higher 23.5%.1 If you qualify, getting a low-interest credit card can help you save money since paying less in interest means you’ll be able to pay back your balance quicker.
We’ll go over the basics of credit card interest rates and tips for finding one with low interest.Read the blog here: How to Get a Low-Interest Rate Credit Card?
https://nybankruptcy.net/main/bankruptcy-resources/bankruptcy-law-information/consumer-bankruptcy/If you have suffered a financial setback and cannot keep up with your credit card, mortgage or other debt payments, filing personal bankruptcy may help you reduce or eliminate debt and offer you a fresh start.
