In Singapore, almost everyone has at least one or more credit cards stashed away in their wallets. This is due to the fact that apart from the ease of obtaining one, the hassle-free experience it provides is convenient.
But despite its innate benefits and additional freebies depending on your credit agency, even the slight misuse could get you to end up with a ton of debt on your plate.
Hence, if you’re a first-time credit card holder or someone who’s facing such a problem, here are four tips to keep in mind to settle your credit card debts.
Pay your balance in full as soon as possible
The simplest and most effective way of staying away from credit card debt is to pay any and all of your outstanding balances sooner than later. If you end up with a little bit more extra cash at the end of the month, prioritise your remaining debts and use them to pay them off in addition to the monthly payment you’ve made.
Paying what you owe in full as early as possible means less interest accrued as well as eliminating the odds of you missing a payment and getting penalised with late fees.
Strive to meet your minimum monthly repayments
If your budget doesn’t permit you to pay in full just yet, then strive to meet your minimum monthly dues and ensure that you take care of them early or on time.
As briefly mentioned in the previous section, doing so will allow you to avoid having to pay unwanted fees incurred from a delayed payment or missing it entirely.
Close out all your non-essential accounts
Owning multiple credit cards can prove to be difficult once you’re out of the initial honeymoon phase. Considering the inherent fees and interest that you need to keep track of when owning one, it’s not hard to imagine the sheer effort required if you have more than one.
Therefore, it’s important that you keep one or two credit cards that are most useful to you and have the lowest interest rates and then close out the rest. Doing so allows you to better manage your credit card usage and prevents you from accruing debt that may go unnoticed until it’s too late.
Prioritise paying off debts with high-interest rates
If you’ve engaged with multiple credit card agencies and have outstanding balances on each, focus on the one that has the highest interest. Putting it at a higher priority doesn’t mean paying less attention to the others – it means focusing on clearing it as soon as possible to save yourself the money that could otherwise be used to pay for your other debts or saved for a rainy day.
An excellent way of tackling this suggestion would be to apply for a debt consolidation loan from licensed moneylenders in Singapore. The gist of it is that you apply for a loan that will pay off your remaining balance on the account with the higher interest. Applying for a debt consolidation loan means paying significantly less interest than that high-interest credit account, saving you a sizable sum.
Without a doubt, credit cards are the epitome of modern living and are even a must-have in most countries. But if you’re not careful with your usage, you’ll likely be faced with debts that can burn a hole in your pockets. Besides the tips mentioned above, it’s also recommended to seek credit counselling to manage your credit lines better or opt for monthly instalment loans in Singapore instead of relying on your credit card all the time.