Credit card balance attracts a high rate of interest. Don’t get carried away by the “minimum payment due” box in the credit card statement. When you avoid making full payment of your credit card balance and postpone it to the next month, it will eventually add up. If you have a credit card balance, make its payment your highest priority. Here are some tips for you to pay off your credit card balance.
- Aim to Eliminate One Credit Card Balance at a Time
If you have multiple credit cards and have accumulated balance on each one of it, you need to aim to remove one credit card balance at a time. It will take some time to clear all credit debts but the earlier you start, the better.
Start from the credit card with the lowest credit card balance and then try to save as much money as possible to repay the card balance. While you clear the lowest credit card balance, you can pay the minimum payment due of other credit cards. Another strategy is first to start paying the credit card balance that has the highest interest rate.
- Request You Creditor for Lower Interest Rates
If you have a good credit score, you should ask your creditor to lower your interest rates. If you are a long-term customer who makes regular payments, your lender might consider your request and decrease the interest rate by one or two percentage points. Even a one or two percentage point reduction in the interest rate can save you hundreds of Singapore dollars annually.
- Transfer Your Balance
It might be tempting to transfer the balance of the credit card with the higher interest rate to lower one, but you need to do it cautiously. While it is a smart move that can help you save money, you need to be committed to paying off your credit card balance in a speedy manner by making monthly payments on time and not increasing your credit card debt. The low-interest window lasts only for 12 to 18 months. If you fail to clear your credit card balance in that time, the interests might skyrocket, and you will end up paying higher interest rates than before your request. Additionally, do not make purchases with a new card, as the lower interest rate might not be available to you after transferring the credit card balance.
- Find a Licensed Money Lender
Borrowing from a licensed money lender is one option to pay off your credit card balance. The new moneylending policy tightened the amount of interest money lenders were allowed to charge, making them a safer choice as compared to before. Furthermore, they are your best choice for obtaining a fast loan Singapore, due to their quick approval process.
- Make Two Minimum Payments Each Month
A credit card issuer levies interest charges on balance on a daily basis. If you are cash strapped and unable to follow any payment strategy mentioned above, you can try to make two minimum payments each month against your credit card balance. Though it looks like a small effort, your average credit card balance is reduced two times in a month, which will make you debt free in lesser time.