Get Out of Your Credit Card Debt in 4 Simple Steps

Credit cards can be the best financial tools when used responsibly and the worst when you don’t know how to manage them. Missing your credit card bill payments or delaying them can result in high debt that can lead to your unhealthy financial life. Many people find themselves stuck under unmanageable debt and find it very difficult to get out of it as it gets increasing day by day due to the interest and other charges. Not only this but having credit card debt can have many more consequences. If you are also going through the same situation, this article will help you understand how you can get out of a credit card debt just by following the 4 steps as mentioned below. Keep reading to know more:

Strategize Your Credit Card Payment

Before taking any step to pay your credit card bill, you must plan how you are going to do so. Decide whether you are going to pay it all at once or in parts by converting it into EMIs. If you are paying all it at once, make a plan of how and what effects it can have on your financial health. For example, if you pay your credit bill using all your savings and your monthly salary too, you can find it difficult to manage your household and other expenses the whole month. Similarly, if you are going to pay it in EMIs, choose the EMI tenure wisely and try to pay it soon as possible, keeping your other expenses in mind.

Also, if you are having dues on multiple credit cards, pay off the one with the highest interest rate first and second-highest after that, and so on. Calculate which one is getting you maximum loss (due to high outstanding amount or high interest rate) and pay off that first. You can also choose to pay the one with the lowest amount first as it will motivate you to go further and clear all your dues fast.

Limit Your Expenses

If you are already stuck under high debt, you might have understood the negative impact of unnecessary spending on your financial health. So, you should make a list of all your necessary expenses, prepare a budget and try to stick to it so that you can use the rest of your savings to pay your credit card bill. Many people often overspend when they have credit cards, but this is not what credit cards are for. Credit cards should be used to get financial stability or to get instant funds in emergencies, and not to be left with poor financial health due to overspending. So, try to limit your expenses and spend only where it is necessary, especially until you repay all your dues.

Automate The Minimum Amount Due

Setting up autopay for credit card bill payments is one of the best options to avoid missing payments that can lead to high debt. If you are already going through a financial crisis due to credit card debt, you might have understood the importance of timely payment. So, set up auto payment for your credit card so that you can avoid such situations in the future. If you can’t set autopsy for the outstanding balance, at least automate the minimum amount due so that you can avoid the late payment charges.

Pay Off The Full Outstanding

After following all the above steps, the final step is to either pay off your full outstanding or convert your credit card bill into EMIs with the shortest possible tenure. You can easily convert your credit card bill into EMIs (prefer no-cost EMI if possible) through net banking. Moreover, to pay it all at once, you can either do it using your own savings or by one of the following methods:

Balance Transfer: You can transfer your credit card balance to another credit card, which the 0% introductory offer is still going on so that you can pay your credit card outstanding without the high-interest charges on your current credit card. However, you need to pay a balance transfer fee if you choose this option, so make sure to calculate whether it is a good idea to go for a balance transfer or not.

Personal Loan: You can also choose to take a personal loan with a lower interest rate to clear your credit card dues and then repay the loan in Easy Monthly installments.

Bottom Line

These were some steps and tips that can help you get out of a credit card debt, but it is better to never get into a situation like this. Credit card debt is generally a result of missed/delayed payments, which should be avoided as it doesn’t only affect your financial health but also has a very bad impact on your credit score. Still, if you find yourself having high credit card debt, you must try to get out of it as soon as possible as it gets increasing every day. If you still have any doubts regarding the topic, do let us know in the comment section below. Also, make sure to share your experience of getting out of a credit card debt.