Credit Card Debts: Credit card users who opt for a temporary ban for a period of six months will not only see an increase in interest but also an increase in monthly installments (EMIs).
The government has imposed a six-month moratorium on small and middle-income borrowers in the wake of struggling with credit card arrears. However it will not be negative for them. Personal borrowers, especially credit card holders, have to pay the debt six months after the end of the moratorium. Credit card users who opt for a temporary ban during this six-month period will not only see an increase in interest but also an increase in monthly installments (EMIs).
Credit card users have to pay a large amount of arrears due to compound interest. Credit card users feel that the interest on such loans is already high. In this context, if you find it difficult to pay off high credit card arrears, there are a few options that can help you get rid of them. Let’s look at Avento now.
1. Balance transfer facility ..
High credit card arrears can be transferred to another credit card with lower interest rate to reduce the interest rate burden. It’s the most common facility for credit card companies to transfer their balance at low interest rates to customers who want to reduce their debt burden. Those who opt for the Balance Transfer facility will not have to pay the penalty along with the low interest amount.
2. Pay small amount without failure ..
If you have more than one credit card and face financial crisis, try to pay the minimum amount due for each card without any failure. Failure to do so will result in you incurring penalties in repayments as part of future planning. You could offer a slight reduction for timely payments, to encourage late payers. 3. Pay the outstanding amount in the form of EMIs.
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Another way to reduce credit card debt is to convert arrears into EMIs. This rate is usually lower than the interest paid. Credit card arrears usually need to be cleared on a monthly basis. If this fails you will have to pay a higher interest rate. If you are under financial pressure, opt for the ‘Convert to EMI’ option offered by your bank to reduce your total interest burden.
4. Convert to personal loan .. It is a
well known fact that credit card loans have to be paid at a higher interest rate than the loans normally taken. If you fail to make monthly payments your financial situation will worsen. It is a good idea to choose personal loans if you have to pay off a credit card loan with high interest. Although personal loans carry high interest rates, they are much lower than credit card rates. You can calculate the amount of arrears on the credit card. Also get a loan from a bank that offers a cheaper interest rate. Then you can clear your credit card debts. However its impact is likely to fall slightly on your credit score. Debt settlement can make the difference between success and failure.
5. Reduce unnecessary expenses.
Lock down .. has had a very severe impact on the people, especially the middle class people. Many credit card clients face these difficulties when their job or income is reduced. In this situation, credit card discipline – it is important to prevent yourself from spending on unnecessary items. Experts say that credit card management is much easier if you follow the simple rules. In a situation where your current credit card debt is high .. try not to get stuck in new debts. Because it simplifies your goal of becoming debt free.
