A credit card debt is a debt accumulated to a person’s credit card balance, due to delayed, late or missed payments. It can be accumulated over days, months or over the years. It is certainly a difficult thing to deal with, yet ensuring proper measures during this time, can help one solve this problem. The Best thing to do in such a situation is to limit the use of the credit card and consult an insolvency practitioner firm like Hudson Weir Ltd.
For this, ensure following the below key steps:
● Step 1: Figure out the debt amount.
The process to pay off the debt amount begins with identifying the physical parameters of the problem. Instead of assuming whether you have a large or a small amount to pay, calculate the exact amount of debt that needs to be paid off. For this, ensure that you consider the total outstanding amount as the amount to be paid, instead of the minimum due amount. This will help you generate a plan that will be realistic and achievable, and also will help you consider your expenses in accordance with the debt to be repaid.
● Step 2: Generate a plan for repayment
After figuring out the loan amount, plan out on how it has to be paid, by managing it with the sources of income and the expenses at hand. For this, break out the debt that can be paid over in installments or in a lump sum, only after paying the loan EMIs and other financial commitments for the month. The plan set out must be realistic and should not overburden you. Ensure that you don’t end up in other debts instead of paying off the credit card debt you are already accustomed to. Financial sanity should be maintained at all costs.
● Step 3: Line up cards as per the debt
This step is important to be followed by people who own multiple credit cards under them that are accustomed to the credit card debt. In this situation, try to line up cards as per the higher outstanding amount, that will automatically be charged with higher interest. Thereby, line up the cards according to the liability that it is imposing, and pay off the ones that offer a higher burden, sooner than other cards. This will help you manage your debt well, as making large payments at the earliest, will also ensure the other card issuers of the debt repayments.
● Step 4: Stay active
Using your credit card, while already being under its debt, is most commonly advised by all. However, the best thing to do in such a situation is to limit the use of the card, instead of completely being off-active. The limited usage of the card will help you build your credit score, which is inactive on the card won’t do. However, ensure that the card is used only for minor expenses and not for the major ones. If you again plan on using the card for bigger deals, in order to boost the credit score, it’s better to stop. Making minor expenses will keep you safe, and will also be reported on the credit report.
The Right Way to Pay Your Credit Card Debt
A credit card Debt is the accumulation of the total due amount that is to be paid by the credit holder. The amount is accumulated under the card holder’s name, due to late, missed or delayed Credit Card payments over days, months or even years. Many people are horrified with the idea of credit card debt, and end up making mistakes due to lack of knowledge and fear of the debt. However, there’s nothing horrifying about the debt, if one handles it responsibly and with complete awareness. This can be ensured by following the mentioned advice, as in:
- Identifying the credit card debt in physical parameters is the prerequisite to paying it off. This means that the cardholder holds a clear knowledge of the total due amount to be paid, and need not confuse the total amount due to the minimum due amount.
- Secondly, ensure a realistic plan for the repayment of the debt. The plan should be inclusive of the current financial responsibilities like loan EMIs, and should not overburden the cardholder.
- Further, if you hold multiple cards under debt, pay off the cards with debts first. This will reduce the debt liability, and will also ensure the card issuers of your repayment ability.
- Lastly, avoid being completely inactive with the credit cards. Indeed, make minor payments with the card, as they can be reported as part of your credit history. However, be certain that you do not make any major payments.
Thus, following the above mentioned, can help you get rid of the credit card debt in a responsible and financially feasible way.
On a concluding note, it is advisable that you follow the above-mentioned steps, and get rid of your credit card debt, as soon as possible. However, the repayment of the debt should be made responsibly and with a clear alliance to one’s current expenses and income.