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“Credit Card” is something that people give priority to in the cashless society era because every time we use credit cards to purchase goods or services, the financial institutions will pay for us, giving us liquidity in the month that we purchased goods and services. However, if you are careless, this convenience can cause you a large amount of debt.
Generally, interest rates and fees for using credit cards will range from 16-18 percent per annum, which is not quite small, and the interest charged will be calculated daily. If you are still paying the minimum, you may have to deal with the brutal interest rate. Moreover, the worrisome is that in 2024, the minimum installment rate is going to rise to 8% and 10% in 2025. You have to be more careful with the minimum payment.
This time, ACU PAY will recommend 6 techniques for those who are facing or are likely to be in debt to their credit cards and want to pay them off sooner.
When you know you start to not be able to pay off your credit card debt, the first thing to do is stop or disable it immediately so that there’s no more debt incurred. Then, focus on your initial income expenses, and start planning a new spending plan, see which expenditures should be reduced and which channel we can make more money to use that additional money to pay debt.
Next is to check how much interest each credit card has, and then we can use the money to pay off the most expensive credit cards’ interest and you should pay off the principal as well to reduce interest.
For anyone who has a duplicate credit card debt from using the money from that card to pay off this card, the solution to this problem is to combine all debt from all credit cards to be one debt with a single bank or financial institution to reduce monthly installments and generate more cash flow each month. Each financial institution should be surveyed again.
It’s something that many people don’t know that we can negotiate or ask for debt restructuring with banks or card-holder institutions to allow us to pay as little as possible, including
For anyone who leaves their debts till the interest is incurred too much and cannot pay, there may be a lawsuit that can be filed in court. Therefore, it is best to negotiate with the cardholder’s bank.
For anyone who does not have so much debt, the credit card debt problems are mostly from ‘minimum credit card payment’ each month. Paying only interest per month does not reduce the principal at all. It is recommended to pay more than the minimum amount which will help in reducing the debt and interest that you have to pay.
After knowing your debt burden, it is important to strictly control your spending so that there is no more debt incurred. After you stop paying debt at the minimum, you must pay off of your debts as quickly as possible because closing them is better than wasting time on expensive interest payments. Finally, the key rule that cannot be forgotten in using credit cards is: If we don’t have enough cash to pay, no credit card use would be the best way.
The most effective use of credit cards must begin with the discipline of using the money. If credit cards are not used properly, then there may be a big problem. If you can get rid of this credit card debt, then freedom will come back to you again, and hopefully, you will not fall into an endless cycle of debt for a second time.
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