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How to Get Out of Credit Card Debt?

How to Get Out of Credit Card Debt?

So, you have been searching for the right answer to 'How to get out of credit card debt quickly?' That's why you are here in this post.

First things first, owning a credit card might sound like a saviour solution that meets your urgent financial requirements. It also helps you make utility bills on time. However, the increased credit card interest might affect your mental health. It may also hamper your credit card score or CIBIL score. So, if you wish to ensure financial peace of mind, you have arrived at the right post.

Using credit cards is only safe when you are responsible for reducing debt. Otherwise, when bills add up on a regular basis on your credit card, you may fail to make payments appropriately. Altogether, it's a frustrating experience to see bills adding up to previous months. That results in a huge debt.

So, if you have one or more credit cards, it's time to make wise decisions. Refrain from the harassment of bad credit reports and other repercussions. Welcome to this post that explains the straightforward steps to get out of credit card debt conveniently. Let's find the steps below.

Easily Get Out of Credit Card Debt in India

Wondering how to move a high-interest debt to an almost 0% APR credit card? The process might sound complex, but you can make things more favourable with a few tips and tweaks. So, are you wondering how to pay off credit card debt when you have no money? The below-offered steps can guide you to get out of credit card debt.

Step 1: Understand How Much Debt You Have

Understanding how much debt you have on your credit card is the prime step. So, follow these sub-steps to make brainstorming easier.

Enlist the Debt Amount

To pay off credit card debt, you must first list your debts on your credit card(s). Write down your outstanding balance on the credit card(s). This step offers an insight into the total debt due if you have multiple cards.

Find Our Credit Card Interest

For multiple credit cardholders, recording the rate of interest is important. You can get the amount for higher interest rates quickly by jotting down the outstanding balance.

Note Down the Annual Charges and Dates

Once you find out the credit card interest, you must note down the monthly payment due. You may write your annual charges to be doubly sure of your debt amount. A sincere individual should also enlist the payment dates on every credit card. They should be aware of the payments to avoid late fees.

Store the Data in an Excel Sheet

Once you compile the data, store it in an Excel sheet. You may use separate columns for your outstanding balances, annual charges, payment dates, names of credit cards, etc. So, the track helps you pay off credit card debt in a more effective way.

Step 2: Make an Approach to Pay the Debt

After you collect the information about your credit card debts, it's time to make a strategy to pay the amount. You can follow the below-offered approach to pay the credit card debt on time and effectively:

Consider the Highest Interest Rate

Each credit card company or bank offers unique and specific conditions. The rate of interest may also vary from one credit card to another. As a cardholder with multiple credit cards, your prime objective is to pay the highest rate at first. Once you pay the maximum interest rate, it will automatically reduce your dues. Using multiple credit cards can make it hard to manage debt. Here you can learn disadvantages of having multiple credit cards.

Opt for EMIs

Credit cards allow you to transfer your outstanding balance into EMIs. You can pay these EMIs monthly. The amount is affordable, and it won't hamper your financial health. Usually, banks and financial institutes charge around 1.5% to 2% monthly to convert the balance into monthly EMIs. You may try negotiating with the bank to lower the overall expense.

Now, you can transfer your money to the new credit card or apply for an instant personal loan option.

Step 3: (Part 1): Transferring Outstanding Balance to Another Credit Card

Someone who owns multiple credit cards can find this step effective. You may close a credit card that has an excessively high outstanding balance. But before you close it, you must transfer the balance to another credit card. The new card may have less interest compared to the last one. If you want to transfer the balance to another card, you can follow these steps:

Request the Balance Transfer Either Online or by Phone

If you want to follow the online steps, first you must log into the account. You must include your name, debt amount, and account details. Alternatively, you can request the transfer via a call.

Be Patient for the Transfer to Happen

Generally, the issuer takes around 2–2.5 weeks to accept the balance transfer request. You might need to make a monthly payment on the old credit card debt. Your issuer offers the terms for this balance transfer by posting the payment directly to the account.

The total payment includes your balance transfer charges (3–5% of your transferred amount). It shows up as the outstanding balance on your account. You may expect to receive a notification as soon as the balance transfer is complete.

Step 3: (Part 2): Apply for an Instant Personal Loan

Most credit card holders (who have multiple accounts) don't feel safe with the previous option. They think it's pointless to close a credit card when there are many others where credit card debt can rise rapidly.

Another reason deactivating a credit card won't make sense is when the card is solely for personal or business purposes. In such cases, when you cannot close the card, you may opt for an instant personal loan to pay your debts on time. Here's your step-by-step procedure to get a personal loan and get out of credit card debt:

Assess Your Eligibility Criteria

The minimum age to apply for a personal loan is between 18 and 21. Someone below 65 can also apply for such a type of loan. You must be an Indian citizen to apply for the loan.

Determine Interest Rates and Additional Fees

Usually, the interest rates might vary from one personal loan to another. If you are applying for a loan from the online portal, you need to follow the instructions mentioned in the financial institute's online portal.

Confirm Your Phone Number

You must press your 10-digit phone number to apply for a personal loan and pay off credit card debt. Soon after that, you will receive an OTP. You must verify it to continue.

Give Your Location and Other Details

Now, the website will ask you for the location. You must offer the pin code and continue. Now, it's time to fill out the form by giving details such as your gender, date of birth, current address, income status, occupation, and email address.

The registered website may ask you for a clear photo. So, you must click on a clear photo and submit it online. Wait for a few seconds for your CRIF report to generate in the backend.

Give Details About Your Occupation

Now, you need to fill out the employment details. Mention the following things to ensure the verification occurs hassle-free:

  • Your company's name
  • The name of your employer
  • Your designation
  • Office address
  • Area's pin code

After giving these details, you need to verify your professional email.

Upload Your Pay Slip and Bank Statement

Soon after you verify your professional email with the above details, you must upload your bank statement and pay slips. Once you upload these documents, you must verify them with your personal documents.

You need the following documents to apply for an instant personal loan online:

  • Address proof
  • Aadhaar card verification

The application is complete once you submit these documents. You must wait for the approval of your application. After the loan application gets approved, you will get the amount credited to your bank account. You can use this amount to clear your credit card debt instantly.

Final Thoughts – A Few Tips to Consider

Most people wonder whether there is any credit card debt forgiveness post-COVID. However, unfortunately, maximum credit card companies do not grant any debt forgiveness until and unless the payment is past due on your outstanding debt for multiple years. You may discuss this with your credit card company beforehand.

So, the above steps make things simple to get out of credit card debt. You can apply for personal loans if you plan to reduce your debts shortly. However, you must find out and understand your eligibility criteria and check the interest rates accordingly.

You also need to check the documents that are mandatory for the personal loan application. With these things considered, you can apply for urgent personal loans. These loans are a great consideration in case of emergencies. However, you must understand its risks and benefits beforehand.

So, this post has clarified your queries regarding 'how to clear credit card debt in India?' Now, it's your turn to follow these steps and make wise decisions.

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