You must see the people in some stores or shops to pay the amount by credit cards. It becomes very common to have credit cards. The trend to keep even small amounts in their pockets is diminishing because everyone is now having credit cards. A valid survey is proved that most of the US citizens have credit cards, some have more than 10 cards also. The increase of using credit cards now changed the mode of transaction as you will see on many places that they only accept payments via debit/credit cards.
Pay off debts
Companies which offer credit cards are basically offering you short term loan. So keep this factor in your mind that by using credit cards, you are taking loan and by taking this thing easy can bring bad effect on your credit scoring.
As I discussed in my previous article that I will tell you the ways by which you can pay off your credit card debts easily. So I am going to write down the important ways to pay off your credit card debt.
Proven ways to pay off credit card debt:
- Stop down your credit card usage:
Yes it’s the most important thing that you have to do if you are under huge credit card debts. You can throw your cards away as if you use them then its very unlikely that you wont be able to pay off your credit card debts.
2. Take a close look on your credit cards debt:
Just have a look on all your credit card debts, categorize them on the basis on interest rates. Give the priority on that debt which got lowest interest rate.
3. Attack on your savings:
You feel this sentence funny? But its true, its more important to repay your debt than the savings. Most of us don’t disturb our savings, but if you have savings then you should pay off your debt on priority basis. The question arises why should we do that? The answer is very simple its only due to the increase of interest rate. If you don’t pay off the debts then you will have to repay your amount with huge interest. And this interest increases by the time passes. You can save your extra interest payment by early payment.
4. Use your Social contacts for taking loan:
This is the best way to take loan. Because it is very likely that family members like brother, sister and parents won’t charge you interest on the loan. So use your all social contacts like your colleagues, neighbors and your love ones. Then you will able to repay your debt by taking loan from your social contacts.
5. Go for Home equity Loan:
Do you something good about home equity loan? If you really want to pay off all your debts then read this step carefully. Home equity loan is also called HEL, usually HEL got very low interest rates as compared to other loans. So HEL will be beneficial in 2 ways. One side it will be used to pay off the debts, on the other side you will have to pay small amount on interest on HEL, so interest expense will also be saved. But unfortunately people don’t make proper use of Home equity loans as they repay all their credit card debts. But after sometime they again using credit card so consequently in the end they have to repay credit card debts as well as Home equity loan. I already told in my previous article that if you are in debt that stop using credit cards.
6. Contact your creditors for help:
If you are unable to find any other way to pay of your debts then contact all your creditors. Meet them and brief them about whole situation. If you really want to pay off their debts then they will hear you and will agree on negotiation. Re-negotiate all your debt terms. Make new payment plans which will be easy to follow. Remember that your creditors will not leave any penny but yet they can lenient your payment procedure. So it will be helpful for you.
In the end I would like to say that follow the above steps to pay off the debts, but if you are still unable to pay settle all your debts then you got only last chance. You can only file bankruptcy. After declaration of bankruptcy by court will give you some relief from settle all debts. But yet there are number of drawbacks attached with filing bankruptcy. Your credit record will be destroyed by bankruptcy because your credit record will contain the “medal” of bankruptcy for 10 years. Consequently you would not be able to get any further loan for 10 years. So I would suggest you that don’t take debt easily. It can destroy your reputation. So always think lot before making any extra expense. If you will be able to control your expenses then you can easily pay off your existing debts and you would not have to feel any inconvenience due to debts in future.
