How To Manage And Pay Off Credit Card Debts In Singapore

Credit cards are some of the sneaky ways that debt can pile up without you realising. It’s easy to spend a little at a time, only to find out at the end of the month that your bill has skyrocketed.

And when that happens, it can be a struggle figuring out how to clear that debt. While credit cards are very convenient, the downside is its high interest rate. Those who fail to pay up in full at the end of the month will risk accumulating debts that grow very quickly.

That is why knowing how to clear off your credit card debt in a fast and manageable way is crucial. Here are some of the best ways to pay off your credit card debt while minimising further damage to your wallet.

Use a balance transfer or zero interest credit card

These credit cards have a very unique feature of charging zero interest. While it may sound too good to be true, this is only relevant for a period of 6 to 12 months (depending on the issuing institution). Essentially, it is a grace period you can make use of while you source for ways to save up or acquire funds to clear your debts.

The card allows you to transfer your existing credit card balances onto it, so your debts do not grow. However, the crux is that you have to clear the debts on this zero-interest card before the stipulated timeframe. Otherwise, the interest rates incurred after that point is usually quite high, at about 26%.

Transfer your debt to a personal loan

The critical issue with credit card debts is their sky-high interest rates. Thus, if you are unable to fully pay off the debt in time, your next best step would be to minimise the growth of this debt due to the interest rate.

One thing you could do is to take out a personal loan with a bank or licensed moneylender in Singapore. Personal loans have interest rates not exceeding 4% per month, which is significantly lower than the 20% rate most credit cards charge. Furthermore, personal loans are usually quite easy to apply for. With licensed moneylenders, the eligibility requirements and application process are typically very manageable, and no collateral is needed.

Take a debt consolidation loan

While personal loans are quick and convenient, it may not be feasible if you have several large outstanding loans. In the event you are not facing just one credit card debt, but several of them, you can consider this type of loan. Debt consolidation loans are available to those who have debts amounting to at least 12 times your monthly income.

Debt consolidation loans in Singapore are available at banks and moneylenders, and help debtors manage their debts. By consolidating multiple debts into a single low-interest loan, debtors only need to focus on making timely payments to one entity.

Conclusion

For the people who may not be able to pay off their credit card debts in full, the burden of paying up what you owe in debt can be quite overwhelming. As a result, the methods mentioned above can help you manoeuvre your way out of the snare of credit cards and hopefully start your journey towards living a debt-free life.

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