In a very utopian world, people can get credit cards without worrying about getting into debt because they are savvy enough to know that each swipe translates to debt. However, people have different mindsets when it comes to finance; some are savers while others are spenders. Unfortunately, there are people who may have swiped their credit cards a little too much, resulting in ballooning credit card debts. Since this can happen to anyone, including the savviest credit cardholders, what can you do when your card debt starts spiraling out of control?
Recognize the problem at hand—and assess your current situation
For you to finally be able to sharpen up your act, the first thing you have to do is to acknowledge that you have credit card problems. A lot of people who rack up tremendous credit card debt weren’t able to get out of the situation because they keep on denying that they have debts. Once you begin to owe up to your mistakes, you can finally take stock of your situation and create a game plan to finally settle your debt. Keep in mind that failing to recognize that you have problems will simply plunge you further down the spiral of debt.
Ask for lower interest rates or more flexible payment schemes
It won’t hurt to try, but the next best thing you can do once your debt starts to balloon is to negotiate for lower interest rates. Once your credit card account starts to accumulate debt, interest will continue to make your debt swell even if you’re not using your card anymore. If you want to keep up with your payments, pay your bank a visit and tell them your situation. Banks will, more often than not, become more lenient with you once they see that you have an intention to settle your debts for good.
Apply for a balance transfer credit card
One of the biggest features of credit cards is balance transfer. It allows credit cardholders to transfer their debt from one card to another, allowing users to enjoy better rates than their previous cards. With balance transfer, cardholders can lighten their load and allow them to make repayments more easily since the interest rates are much lower as opposed to their old cards. Cardholders will not set the frequency but will have the option for the terms like 6 months-24 months (depending on the bank)
Get a personal loan with much better rates
Personal loans exist not only to arm you with the financial power to actualize your wants and needs. In fact, personal loans can also be used to help you with your repayment of your credit card debt. However, you need to find a personal loan program that has lower interest rates as well as flexible payment schemes. Just make sure that you will pay your credit card balance in full once you get approved for a loan—or you’ll be juggling with two loans at once!
Stop using your credit cards at once
Until you are able to pay off your credit card debt, you might want to stay away from using it and stick with cash. While most people will argue that maintaining extreme discipline is the only reason for ditching the plastic, the real reason behind this is to avoid your debt from becoming bigger than ever. Once your credit card debt starts to balloon, all charges made using your credit card are now subject to interests. Until then, just do all your transactions in cash and keep your credit card in a cool, dry place away from your reach.
When you’re done with your payments, get a certificate of full payment
It may take you months, or even years, to finally finish your repayments, and nothing says that you are able to do so than getting a certificate of full payment. The said certificate, which is available upon request after settling your bills for good, is proof that you have a clean slate and you are finally done with your debts. Having a certificate allows you to apply for financial products more easily, even with your marred credit history, so make sure to get one once you’ve finished your payment.
Credit card debts can be scary, but nothing can be solved by denying that you have problems and wishing that your debts will go away. The only way to deal with your debts is to settle your
balance in full. This will teach you a lesson to think before you swipe.