Steps to Payoff Your Credit Card:-
A credit card is useful when we use it properly and paying the dues on time. When it comes to the payment of the bill, which is more than the paying ability, it becomes risky.
Its Become a trap when there is a situation where the bill is more than our earning.
Let’s see how it works:- you can find the best ways to escape from this trap.
It is easy to get a credit card for a salaried person and a businessman. the credit companies issue the cards with minimal documentation. the credit limit of the card will depend upon following criteria
- Credit Score of the Individual
- Past Credit History
- City of living.
- Company and Work Experience.
When it comes to billing, the credit card companies give 20 days for bill payment.
We need to pay the bill for the subsequent month.
Why is Credit Card a Trap?
When spending a credit card is virtual money. as people psychologically don’t think the money value.
Spending physical cash the chances of spending on the unimportant things will be less. When we think spending with credit cards equals to the debit card.
Every single rupee you spend on a card, you need to pay off. More Over the following are the disadvantages of Credit cards.
Heavy Interest rate
When you compare with the Personal loan with Credit Card, the rate of interest on late payment will be high. Moreover, card companies levy multiple penalties, like late payment fees, interest, and GST.
When it comes to personal loan the late payment fees are less than the cards.
When it comes to spending it will encourage people to spend more. as we can see that the different online shopping platforms encourage people to buy with the cards and give the discount.
Here we need to think is spending not the discount. whatever discount you may receive finally the result increases the bill.
Moreover, we can easily tend to spend with cards.
Chances of Fraud
This is really a bad thing, as we hear every day on news about the different types of frauds.
In our digital world, there might be chances of fraud. It is an unexpected thing that credit card might be stolen, numbers might be copied and may steal the amount.
Finally, How to escape from it?
Definitely there are some prooved ways to pay off and close your cards. you can find the right ways to do right now.
Step 1.Take Personal Loan.
Yes, It is the right choice for you. suppose if you have a high amount of bill and continuing by paying the minimum amount the payment of interest is heavy. and the bill remains the same for every month.
The credit card interest will be nearly 40% annually it is difficult to pay off the bill with a heavy amount of interest.
Choosing a personal loan can help you to pay off the amount at a single time. if you are staying in Hyderabad our team can help you to get the Lowest Interest Personal Loan in Hyderabad
Or You are residing in Bangalore, our executives will ready to help you in getting the lowest Interest rate Personal Loan in Bangalore
Below are the main uses and advantages of Personal Loan.
If you are looking to find the Personal Loan there are various advantages.
Lower Rate of Interest
While you are comparing with the credit cards vs Personal Loan, the Personal loan will become first in the Lowest Interest rate.
The Interest rates are starting from 10.5% based upon your credit score, Job and Income the interest rate will be defined.
There are multiple banks offers Personal Loans with a different rate of interest.
In this rush market, chances of confusion will be there while choosing the right lender.
Our Personal Loan Xpress Team compares the multiple banks for the lowest rate of interest. Based upon your profile we suggest and provide the loans with the best rate of interest.
Banks deduct the amount from your account every month for a certain so there is no need to go to the bank or you need not pay manually.
The thing is you need to maintain a sufficient amount against the loan.
No Change in Monthly Payments
As we compare with the credit card with Personal Loan the payment of cards is might not equal for each month.
But the Personal Loan EMI will not be changed it is equal till the end of the last EMI
Moreover, the loan will pay off month and month it will become zero after the payment of last EMI. But credit cards will not payoff until unless you stopped spending on it.
Step 2.Convert It into EMI
When you are not able to pay the bill then convert to EMI. the interest rates will be 13 to 19 as well as card issuer will levy the processing charges and GST.
It is better to pay the heavy interest rate on EMI comparing with the late payment fees.
Step 3. Don’t Plan for New Spending
It is better not to plan for buying new things because the debt will be piled up month and month. It is not suggestable until unless it is very important.
Step 4. Break the Confusion
Yes, don’t wait for the right time to break your confusion with the multiple cards. If you have multiple cards so you will have multiple payment due dates.
For suppose if you have 4 cards. and think one is generated for 2nd and remaining are for 7, 16 and 28 how confused it is?
Start closing the cards which have a less due and high interest as well as low credit limit. Then go for the next lowest due card.
So that there is no confusion on multiple payments and multiple due dates the most important thing is you can easily track your spendings.
Step 5. Balance Transfer
Card companies allow you to pay your other credit card bills with a balance transfer facility which levied a transfer fee.
You need to get approval from the card issuer from which you are paying. It is not suggestable due to the no change in your debt.
Step 6. Gold Loan
Obtaining Gold Loan is not a bad idea there are multiple lenders offering gold loans. Go and compare the interest rates and you can easily get the amount because it “secure loan” in the manner.
Step 7. Plan your Expenses
Planning the expenses for a month you can find the different expenses which you can escape and unimportant.
Based upon the create a cheat sheet of your spendings. while you are planning, give priority to the existing debts like home loan, credit card and bike loan.
Step 8. Spend by Cash
When paying with card vs pay by cash is more difference. paying by cash will let you feel your spending on another hand psychologically
There are high chances of spending with virtual cash.
Step 9. Maximize the payment and Minimise the spending
On the other hand, start by paying the lowest amount for the credit cards which are low in the interest rate and pay the higher amount against the cards which are high in interest rates.
So you can save the extra interest. Try to find another way like earning extra income and decreasing expenses.
When you are decided to close the credit card start planning from consolidating the total outstanding. Find your convenient steps as per the above steps hence the Personal Loan highly is Recommend
I am Ram, I have completed Master of Commerce, I am Finance writer and Personal Loan Advisor in Personal Loan Xpress. I love to write finance articles and i consult the people regarding their financial decision with my Expertise.