Credit Cards have become a necessity of life these days, but one should use it carefully because spending much more than your capability of paying it off. More expenditure would increase the chances of having to take out a Consolidated Debt Loan or accruing bad debt in general. A Consolidated Debt loan on your Credit Card can be a headache. It stays as a burden over your head until you pay it off in full.
There are many ways of paying off your bad debts, including credit cards. Many of them are mentioned here, which will prove to be helpful to those with bad debt and even to those who are expecting to get a new credit card.
– Start by setting up financial goals, which could help you in paying off your bad debt. Accumulating debt is easy, but paying off those debts often takes a lot of time. All those who are under the burden of credit card debt should first of all prepare a list of the debts by gathering all of their card statements, and arrange it in the order of the priority i.e. the one which is very expensive and which has high interest rate should be kept on top, and other thereafter.
– Once you have prepared your list and set up the goals, you should keep on reviewing your progress, so that it keeps you motivated. It will help you in striving hard to pay off your debts in short period of time.
– Take your credit card out of your wallet and keep it in a place where you don’t confront it again and again. This will aid in your resistance from using the card and accumulating more debt.
– What you could also do in paying off credit cards, is to keep a tab over your expenses. Try to go for only those which are really necessary for you, and don’t indulge yourself in unnecessary expenditure.
– Another good way to clear off your bad debts easily is to use your savings, it could prove to be a boon in such circumstances. Whereas, it is not recommended if you do not have much savings or some strategy through which you can again gather much savings in shorter time span. Go for your savings in such case only when the condition have started getting worse, because spending your savings for paying your debts could lead to financial insecurity for you in the future as savings can be used as emergency funds for the future.
– One can go for Debt Re-financing, also known as Debt Consolidating Loans i.e. another loan which is specifically available for paying the consolidated debts. You can opt for a Debt Refinance, which is available at low rates of interest.
– Balance Transfer of your current Credit Card to a new credit card with low rates could help you in getting rid of your loans with ease; however it becomes necessary to get all the information related to your new credit card. Be careful of any kind of hidden fees, cause if there is any, it would simply be a waste of efforts and money. Even though, Balance Transfer is really helpful, but could impact your credit.
– Paying your credit card debt by choosing the lowest available EMI (Equated Monthly Installments) won’t prove to be fruitful. This is because it would lead you to pay high amount of interest over time.
– Another good option is taking out equity of your house or other property to pay off your debts. Although one should check for the value of his house or property before going for it because property prices may be rising up and going down. Sometimes choosing equity for property could lead one to increase his debts; probably because the property they have mortgaged may value lower than their debt. This option is used because mortgage rates are lower than credit card rates. Be careful doing this though, and to be sure that you don’t accrue any more debt with this sort of debt reduction strategy.