Rolling over high credit and not being able to clear monthly dues has become a common problem with cardholders. Most cardholders max out the credit limit and spend recklessly, because of which they find themselves deep in debt. A lot of the times, individuals don’t even realize what is happening since credit card companies offer an instant solution to the cardholders to manage their expenses and purchases. Though this facility offers financial help to the cardholders, it is also important for the cardholder to use the privilege smartly, or one can end up in a debt trap. Here are some tips to clear credit card debt:
- The balance transfer method
It is one of the ways to clear off the credit card dues. The balance transfer method converts outstanding money into a low-cost EMI. You can shift multiple credit card dues on one card and freshen up a credit-free period of 90 days to repay the outstanding dues.
- Debt snowball
Snowball is a way that helps you to pay off your credit card dues. The snowball debt helps the cardholder to clear-off outstanding debts and eases the load of repayment. You can clear smaller dues first before moving onto the higher ones. This method builds motivation for repayment of debts.
- The debt settlement option
Getting rid of the dues with debt settlement is another option for clearing the credit card dues. This method is more suited for people who are willing to make large one-time payments. It is a negotiation accepted by the creditors to accept part payment as the final repayment of dues.
- Debt avalanche method
This is one of the most common and known strategies of clearing and paying off credit card dues. All you must do is clear minimum outstanding dues on all existing credit cards and transfer extra money in the account with the highest rate of interest. Like this, you can keep clearing the dues with the highest interest rates and eliminate the debt trap.
- Clearing debts with personal loans
Paying off credit card debts using a low-rate personal loan is another approach of repaying credit card debt. This will help in improving the credit score as you combine your credit card debt with a personal loan. This method can manage your debts and mitigate the overload of repayment and save you some money.
- Pay more than the minimum monthly installment
Paying more than the minimum monthly installment can help in paying off the credit card dues. The minimum monthly payments are set low, so you can repay the debts. The more you pay every month the faster you’ll pay off the outstanding dues.
Well, these are some tips to clear your credit card debts. Timely repayment of outstanding dues will also improve your credit score.