It has been an issue lately in our office about credit card companies calling our people and harassing them on paying their dues. One company even had to scare our employee into suing him if he does not pay even just the minimum payment.
Well that employee is not alone. Hundreds of people undergo the same situation with credit card companies everyday. Probably because of the recent downfall in the global economy that people's finances are greatly affected and had to put aside paying their cards first and prioritizing expenses for basic needs.
What are the best ways to deal with this. Getting a loan to pay for all the cards may help, but let us put that at the end of our list.
One, review your monthly budget and learn to prioritize. Decide which expenses are important and which ones can be eliminated for the meantime. Having a tall frappe at Starbucks everyday may have to be set aside first.
Two, though we are tempted to pay just the minimum payment for our cards, it really does not help at all. A large part of it goes to the interest, barely goes to the principal. So if we can pay more than the minimal payment, let us do so. But if you have multiple credit cards, let's say three cards, pay one card more that it's minimum payments, the other two cards had to be settled with minimum payments for the meantime.
Three, some companies are generous enough with bonuses. Some give out quarterly or mid-year bonus. Use this to fully pay your cards. If it is enough to pay for all, divide it into half. Use the first half to pay just one card just to make the principal smaller and the other half is to be allocated to other credit cards according to its minimum payments.
Four, if your salaries and bonus are not enough, try borrowing from your relatives. Their interests will not be as high as the bank. If you are lucky, they may not even ask interests from you.
Fifth, ask your credit card company. There are some banks which are considerate enough to refinance your credit and turn it a regular loan, payable in so-so months, lesser interest rate and fixed monthly amortization. Try negotiating with your bank. Who knows what promo they are currently offering to delayed or delinquent debtors.
Last and the least advisable way, compute all your credit cards' outstanding balances. For example, your total payable amounted to seventy thousand, try applying for a loan amounting to seventy thousand. Pay off all your cards. Your regular loan will incur much lesser interest than the credit cards which is at 3.5%. At least all your cards have been fully paid and your only loan is to just one bank, with lower interest, lower monthly amortization and easier to monitor.
The key to having a debt-free life is discipline. In our changing and unstable economy, it helps if we could be frugal for awhile. Stay away from sale which will just tempt us to swipe our cards and forget again that we are trying to pay-off our debt.
Mister Linker
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