How to pay off credit card debt quickly
It is easy to get carried away when you have a credit card tucked inside your wallet. You might make purchases that you did not really need. People tend to overspend on their credit cards. In the process, they end up feeling trapped by the rising debt. By the time you realise that the dues are too heavy to manage, you have already done the damage. There is no denying that credit cards come to your rescue at crucial junctures in life. But it does take a lot of fiscal discipline to pay off credit card dues on time. If you have run up a hefty credit card debt, you still can get rid of it. Here are some tips for paying off credit card debt fast.
Begin with a monthly spending plan
It is very important to exhibit self-restraint at this time. Stay clear of impulse buying if you wish to see nil credit card dues. A good starting point could be a clear-cut monthly spending plan. This will teach you to live within your means. Draw up a plan in advance and stick to it. This will cap your expenses and the urge to spend on credit cards will diminish. Budget calculator spreadsheets can come in handy while making such a plan.
Banks give customers an option of transferring the balance due on credit cards to equated monthly instalments (EMIs) on another credit card. There are two ways to go about it. You could select the fixed-duration option or the lifetime-duration option. Say, you choose the fixed-duration option. The EMIs will then continue for between three and 12 months. The interest rate will be around 9%. For the lifetime option, you get a lifetime to pay the EMIs. But the interest rate will be much higher at 12–24%, depending on the bank.
Perhaps you are trapped in debt and do not know how to get out of credit card debt fast. One option is to approach the bank where you have an account. Banks allow their existing customers to pay outstanding credit card dues in EMIs. Choosing this repayment method will be easier too. It will save you from the hassles of fresh documentation needed for balance transfer and personal loan. Moreover, the interest rate will be lower at 0–2% per month, depending on the bank.
Negotiating with bank
Although often overlooked, this is a great strategy to deal with credit card dues. Simply visit the credit card-issuing bank. Tell them about the difficulties you are facing to repay the dues. Let them know that if they charge lower interest rates, you will be in a position to pay them off. The bank may consider this proposal as it would be better than a non-performing loan.
The easiest way of repaying credit card debt quickly is taking a personal loan. If you have a decent credit score, the personal loan will be sanctioned within a day. You can then use the personal loan to pay off your credit card dues. But a personal loan is an unsecured loan. So, the interest charged by banks is higher. It may vary from 14% to 24%.