How To Reduce Your Debt If You Spent Too Much On Your Credit Card This Diwali?
If used wisely, credit cards provide a great opportunity to buy goods and services now and pay for them later. Moreover, a user does not need to pay interest, if the contributions are paid on time.
With many banks offering rebates and cash backs on their credit card payments, more and more consumers are choosing to pay through their cards for purchases made during this festival season.
However, when using a card, the user should keep in mind their ability to pay the entire bill on or before the due date in order to avoid paying interest and / or penalties for late payment. A credit card holder should be extra careful because the interest rates and penalties on overdue balances and defaults are very high.
In the event that a cardholder has already spent beyond their current income level and is struggling to pay the bill, how should they handle their unpaid debt?
“This holiday season, if you’ve spent too much money on your credit cards, it’s best to start making small payments right away so that the outstanding credit card balance goes down by the time the credit card is due. invoice is generated. For the remainder of the outstanding credit cards offer a variety of EMI offers that buyers can use to reduce the payroll burden, ”said Anil Pinapala, CEO and Founder of Vivifi India Finance.
“However, it is better to use products that meet the needs of the spending and users can choose FlexPay to pay for their daily or ambitious needs, as FlexPay gives buyers full flexibility over redemption options. Regardless of the payment choice, the best strategy for paying back on time is to automate payments, ”he added.
5 bad credit card habits that can ruin you Here is what to do
Giving his opinion, Abhishek Soni, CEO and co-founder of Upwards, said, “The best way is to consolidate 2-3 smaller credit cards and take out a personal loan to close them. This will not only improve your cash flow and lower your borrowing interest costs, but also lead to higher credit score accumulation.
Expressing his point of view, Nitin Mathur, CEO of Tavaga Advisory Services, said: “The thrill of Diwali may have caused budgetary constraints to be broken, resulting in overspending. However, if you’ve already gone too far this holiday season, there are alternatives for reducing your credit card debt. “
“The monetization of reward points and the ease of cash back before the expiration of the credit cycle can provide the relief needed to offset large credit card obligations. You can request cash back and redeem reward points to pay off your credit in the next billing cycle if the bill has already been created, ”he added.
“Set up monthly bill payment reminders and select an appropriate and suitable debt repayment strategy, such as the ‘snowball method’ where the smallest debt is paid first, the ‘snowball method’ ‘avalanche’, in which the largest or highest interest rate debt is paid off first, or the ‘debt consolidation method’, in which all debts are consolidated into one account for easy repayment is also essential, ”added Mathur.