Even the most careful of people can face a situation where they are unable to pay off their credit card bills on time. A challenging monetary situation can make you incapable of paying off your liabilities, all of which can have an damaging impact on your financial records and credit score. Depending on the availability of funds, some people leave only the interest unpaid while others may leave their entire bill unpaid at times.
Collecting unpaid dues on your credit card bills can be a disaster, and not just because you accumulate charges for late payment on them. The amount accumulated in interest on credit card dues can quickly snowball into a huge amount that might make you bite the nails off your fingers. Here is a list of options you could consider if you find yourself in a situation like this. This listicle will give you tips on how to get out of debt.
Best Options To Consider If You Cannot Afford To Pay Your Credit Card Bill
Even though you can talk to your lender and ask for some relief options, they may still be able to help you only temporarily. At the end of the day, you will still be liable to pay your credit card bill. Thus, it is right to say that seeking remedial help from a lender is only a temporary option which won’t be of much use to you.
So, what can you do to ensure that your debt liabilities stabilise and you do not get to face the adverse effects of not paying your credit card dues? Here are some options for you to consider.
Take A Look At Your Financial Position
The first step is to monitor your expenses closely.You will need to save every penny that you can at a time like this. For this, you will have to cut down on your expenses to a large extent. It would be best if you aimed to make at least the minimum payments due on your card to avoid attracting a hefty penalty.
Thus, creating a budget is the one thing that can help you save your funds and keep aside surplus money to pay off the liabilities standing in your name.
Consider Opting For A Debt Consolidation Loan
At first, taking a loan might sound like an added pressure that you could do without. However, a low-rate debt consolidation loan may be a good tool to pull you out of your current situation and might be the relief you are looking for. Needless to say, you will need a good credit score behind you to be able to take a loan at this point.
If you manage to get one, you could use it to consolidate your outstanding loans and bring down the pressure of your monthly payments. A balance transfer option on a credit card may bring you the same relief, but that will be a short-term option.
Turn To Your Emergency Savings
If you do not have a good enough credit score behind you, you may have to consider other options to support yourself at a time like this. Ideally, the quantum of your emergency savings should be such that you should be able to meet your expenses for the next 3 to 6 months without any income coming in. In a situation where you are facing trouble clearing your credit card dues, your emergency savings may come to your rescue.
Put aside as many expenses as you can defer for the next few months, or avoid them altogether. Only put essentials on your list of expenses for as long as you are unable to pay back the amount you owe on your credit card.
Opt For 0% APR Cards
If you intend to make necessary purchases from your credit card, opt for one that offers 0% APR options. For over a year, these cards do not offer any interest, and at the same time, also offer a reasonably long period of interest-free charge. However, even in this case, overspending on the card is not encouraged as you can easily fall into a debt trap because of doing so.
Consider the option for a card such as this only in a case where you aim to keep your interest burden at a bare minimum and use the card for essential purchases.
Consider Paying Your Credit Card Bill Over Utility Bills
It may not sound the most convincing option at first, but in an extreme case, if you had to make a choice between paying credit card bill or utility bills, opt to pay the former. This is because the charges and penalties for late payment of credit card bills are far worse than those on a utility bill.
Consequences Of Missing Your Credit Card Payments
There are consequences for each time you miss your monthly payment on your credit card. With time, these keep getting worse. While missing a single payment may only attract the penalty of a late fee and some damage to your credit score, missing more than three payments may entail payment of late fee, substantial damage to your credit score and sale of your debt to a collection agency. Unfortunately, a collection agency will go to any lengths to recover a debt from you.
You may even get penalised with a lawsuit in your name under such circumstances.
The options mentioned above are a simple respite from a situation where you are unable to pay off your debts. However, these can be avoided under all circumstances if you take it upon yourself to make timely payments of your dues and match your income to supplement your expenses. Taking the advice of your lender is one way to keep debt off your hands and find a quick solution to your credit card woes.
Missing payments is quite simple and easy and at first, not as horrifying as it may appear. However, when these payments accumulate to become a collection of multiple instalments, you may find yourself in trouble and looking for options to emerge from the debt trap. The above-listed options may be the only respite for you at that time.
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