Credit cards are the most convenient way to make big-ticket purchases. You can use them to buy furniture, Air conditioners, groceries, and mobile phones. Their “Buy Now Pay Later” approach makes them one of the most approachable finance facilities.
However, the monthly bill may startle you. You may not be prepared, and hence it may lead to rollover. Delaying it for long may affect your credit score and finances. The blog lists some strategies that may help clear credit card debt quickly.
What happens if I cannot pay the credit card debt?
Non-repayment of credit card debt may lead to penalties. You may face increased interest costs, fees, and damaged credit scores. In the worst cases, you may face debt collection agencies that may seize your assets to reclaim the dues. Thus, the best ways to clear the dues must be identified. Check whether you can earn part-time to cover the payments.
Next, check fast loans to meet or bridge the remaining amount needed. It will help you repay the dues to an extent. However, you get only a small amount as a loan. Thus, checking the savings and every aspect of repaying the credit card debt is important. You can also analyse the prospect of negotiating the amount you owe.
How do you stop paying credit card debts and stop worrying about them?
Yes, you do not need to pay the pending credit card bill under grim financial circumstances. Check options like debt settlements, debt repayment plans, or filing for bankruptcy. Go with the one that works best for your budget and circumstances. Debt settlement is for individuals whose debts are in collections and need to be resolved. You can negotiate the payments with the credit card company.
Debt repayment plans are for individuals who cannot afford the payments now. It could be due to a loss of income, business, or a huge expense. Here, the debt management company handles your debts with the creditors. However, closing the credit cards affects the credit score. It may help you consolidate, negotiate, or pay what you can on the debt.
Bankruptcy is the last solution that one should seek. If you cannot pay the debt in 5 years, declare bankruptcy. It is the legal way to gain forgiveness on credit card debt. It is ideal for individuals with basic or no minimum income to meet basic needs. However, recovery may take a long time.
However, it is only ideal in extreme situations.
5 Tricks to Pay Off Credit Card Debt Quickly
Yes, some ways may help you clear credit card debt quickly. The first aspect is to set a limit on credit card usage. It prevents you from using more than needed. Companies allow individuals to decide a limit or a budget for monthly credit card usage. You can check your basic expenses from previous statements. Accordingly, you would not spend beyond that. Here are some ways to clear the credit card debt quickly:
Identify your credit card’s due date
Know the payment dates to budget and plan payments. Identify and set reminders for the different credit card bill payments. It will help you create a budget by eliminating the extra expenses. You can also set direct debits to avoid setting reminders and paying manually. Knowing the amount and the date is essential to avoid late payments. Learn money you need to save by a specific timeline.
- Check the interest, debt, and penalties
After analysing the amount you owe on each credit card, check interest costs. If you have missed the payment, you must pay the penalty. It also means paying interest on the credit card payments. Write these two alongside the credit card debt you owe. Calculate the total interest and other penalties that you must pay. In case of no pending credit card payments, you don’t need to pay interest or a penalty.
- Curb unnecessary expenses
Unless you stop making unnecessary expenses, you cannot budget well. Thus, put a hold on luxuries, goods, and electronics that you want to purchase. Instead, focus on the credit cards and the bill. Begin with the most expensive credit card bill payment. Check cutting on which expenses may help you budget easily.
For example, eliminate paying extra for cable and OTT subscriptions. Check whether you are paying more for gas and electricity coverage. If yes, switch to a better subscription. Next, avoid engaging in weekend gateways or shopping for a while. Instead, save that money for credit card bill payments.
- Choose the best way to pay
Identify the mode of payment according to convenience. Generally, paying through a bank transfer is cheaper than most payment options. It is because you don’t need to incur a transaction fee. Alternatively, setting a direct debit from your debit card simplifies the deal. You don’t need to remember payments. However, you must ensure a substantial amount for the direct debits to work.
If seeking an affordable option, check out unsecured loans. These offer much flexibility, freedom, and spontaneity to clear debt. You don’t incur heavy fees here like a credit card. Instead, you can repay the dues in easy instalments without worries. Unsecured personal loans are perfect for any financial background.
You don’t need to have a handsome income to qualify. Instead, the earnings should be sufficient to meet the repayments and necessities. You can even use it to pay multiple credit card debts at once. It reduces the total balance you owe and interest liabilities. The other two aspects do not offer this facility.
- Seek help if needed
If you don’t find a suitable solution to your debt, seek an expert’s help. Organizations like Moneyhelper.co.uk and Citizens’ Advice portals may help. These experts may help you counter the situation according to what you can afford.
Bottom line
These are some of the best ways to clear credit card debt quickly. Identify the amount you owe and the payment dates. Set direct debits for the respective credit card payments. Check whether the direct debit account works well. Otherwise, it will be a waste of time. Next, identify the prospects to negotiate the payments. You may also check debt settlement and debt management plans if you cannot pay at all.
