Credit Cards can be a good friend of yours if you are wise enough to get the benefits out of your credit card. But, if you don’t use your credit card wisely, you can get trapped in a huge debt that keeps increasing with time. If you have made a large spend on your credit card and you didn’t pay the bill on time, the outstanding balance keeps increasing due to the interest and the late payment charges on it. It becomes even more unmanageable when you have withdrawn a lot of cash using your credit card as there is not even an interest-free period on cash withdrawals. No matter how you have consolidated debt, but once you get into it, it becomes challenging to come out of the debt trap. Along with impacting your financial health badly, it also impacts your credit score in a bad way. Now, the question that arises is how can you pay off debt without hurting your credit score. In this article, we will help you understand some best ways to pay off your credit card debt:
Best Ways To Pay Off Debt
If you have consolidated a lot of credit card debt, you might be very much worried about paying it off. Credit card debt can be one of the worst nightmares for everyone as it doesn’t only impact your financial health but your credit score may also fall down if you don’t pay the outstanding balance on your credit card for a long time. It is advisable to pay the full outstanding balance on your credit card every month, but if you have failed to make the full payment due to some reason, you should try to clear it as soon as possible. The following are some of the best ways to pay off your credit card:
By Taking a Personal Loan
It might seem to be a weird idea to take a personal loan for paying credit card debt, but it may be really helpful sometimes. If you are stuck under a huge outstanding balance on your credit card and it is constantly increasing due to the interest and late fee, you can consider taking a personal loan with a lower interest rate. If your credit card charges a high-interest rate, you should look for a personal loan with a lower rate of interest. As you will have more time to pay for the personal loan in EMIs, you can repay the loan later and avoid the increasing debt on your credit card. But make sure that the convenience fee and interest rate on the personal loan are not higher than that on your credit card.
By Balance Transfer
Balance Transfer is also a great option to pay off credit card debt. Almost all the major card issuers offer a balance transfer facility nowadays under which you can transfer your credit card’s outstanding balance to another credit card with a low-interest rate. You can look for the best balance transfer credit cards and if you can get any of them, you can transfer your credit card’s outstanding balance to the new credit card. Try to get a credit card with a 0% introductory APR so that you can get sufficient time to repay the debt on your new card. If not 0% APR, make sure that you are transferring your credit card balance to another card with a lower rate of interest. It is because there is no sense in transferring your balance from a high-interest credit card to another high-interest rate credit card.
Convert Credit Card Bill Into EMIs
Converting your credit card bill into EMIs is also a very good option to manage your credit card if it’s a really huge amount and you are unable to clear all this at once. Almost all card issuers allow you to convert your credit card bills into Easy EMIs. You can directly make EMI transactions for large purchases or you can convert your bill into EMIs later with the help of internet banking. You should check the fees and interest associated with EMIs and go for it if it looks to be a good option.
You should always try to pay your credit card bills on time, but even if you have consolidated debt, your first priority should be to clear it off. It is because the debt keeps increasing and it can lead to your poor financial health over time. People often get trapped in unmanageable debt and then they start believing that credit cards make you fall into a debt trap. But, credit cards will never be bad for your financial health if you use them responsible and wisely. You should try to pay your credit card bill in full every month and if you have made some really large transactions, you can use any of the above methods to minimize the risk.