Credit card dues is perhaps one the most acute millennial financial problems. There are very few people who do not use a credit card and almost everyone is worried about the rising debt. One cannot deny that credit cards has made shopping really easy and comes handy in emergencies but they could be problematic if you have been paying off just the minimum amount every month.
If you have broken off your estimates, the time is perhaps right to get things back on track and here in this article, we take a look at few of the options which might come in handy.
1. Maybe go personal: One can opt for a personal loan to get rid of the credit card loan. May not generally look extremely viable, but there is some fine print to be considered. A personal loan comes at a much lower rate of interest when compared to the astronomical interest rates of credit cards.
2. Liquidate investments: This is an option that can be seriously explored. Now, since, a credit card debt attracts around 36-40 per cent interest, and interest from investments only yields half of this rate, one can break FDs or the other low earning investments in order to pay off the credit card debt.
3. Why not EMI: It is perhaps the easiest option to go for as you can divide all your credit card dues into monthly EMIs and then pay them off.
4. Snowball method: Since you are desperate to get rid of the credits and get your financial scheme of things back on track, you can also opt for snowball. It is a method that helps cardholder payoff the dues steadily one after the other which is a great way to ease the repayment burden. Even if one clears off smaller dues first using this method, it will see an improvement in the credit score and hence reflected in the credit utilization ratio.
5. Top-up: There is another option which is called the top-up loans. Apart from the personal loan, cardholders can also opt for a top-up loan. It can be taken advantage of along with the existing home loan. So, if you have been fairly regular with the home loan for more than 2 years, you will easily be eligible for a top-up loan.
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