Increased credit card debt indicates that you may have a habit of overspending. Also, with increasing credit card interest rates, not paying your bills on time or not able to pay the minimum amount required can cost you even more than what you owe.
Here are a few tips that you can follow to ease your worries about paying off your credit card debts:
Put a Break on Large Expenses
Cut down your avoidable monthly costs by identifying them from your recent statements. Make sure to analyse which expenses are important and eliminate unnecessary expenses. Large expenses can be reduced by cutting on long holiday plans or expensive shopping habits. It is also suggested that you constantly monitor your online credit card usage and reduce the usage wherever possible, to avoid higher credit card dues.
Clear Dues with Higher Interest Rates First
Make a list of credit cards in the order of highest interest to lowest interest. If your priorities are long-term goals, pay off dues for cards with higher interests first. This would lower your overall dues considerably and helps you pay them off in an easier way.
Consolidate Your Debts
Transferring your debt from a credit card with a higher interest rate to a card with a lower interest rate can be very useful. Dues of higher interest rates can be consolidated to form a single billing amount with a considerably lower interest rate. Even though, there is a fee of up to 5% charged on the balance transfer, but the money that you save from a lower rated card is generally higher than the fee.
Pay More Than Minimum
While credit cards offer you the benefit of paying only a minimum amount, in case of large debts, it is advisable to always pay more than that. Paying the minimum amount would allow you a longer tenure to pay off your credit card dues. On the other hand, paying more than the minimum will let you pay off the debts at lower interest rates. Moreover, if you ensure timely payments of your entire dues, you do not have to pay any interest rates.
Evaluate Your Budget Regularly
If you feel like your credit card dues are increasing, create a new budget which prioritizes your credit card debts and long-term financial goals while setting aside some funds for emergencies. Make sure to set strict budget constraints with due consideration to your monthly credit card dues.
You can follow these simple steps to pay off your credit card dues much more easily and to even reduce your credit card debts.
You can also visit YES BANK's website to know more about their Savings Account, NRI Savings Account and Fixed Deposit Accounts.