Credit Card Debt: How to get out of it and not get in anymore? | Embracon Consortium

Credit card use is increasingly popular among Brazilians seeking security and even convenience for shopping or paying bills. But along the way, some things can happen and you end up accumulating a credit card debt.

Often because they have not learned how to handle money, many Brazilians lose control of their spending and accumulate credit card debt.

To give you an idea, this bad habit has made the debt on the card responsible for much of the default of the Brazilian consumer.

The reasons for this debt can be various: that purchase made in the heat of the moment to take advantage of the promotion; non-payment or payment of the minimum card amount; the revolving credit with interest that is being accumulated and charged by the card operator, among many others.

If this is your reality, you need not worry. We can teach you the way to financial peace! Read on and learn some ways to get rid of this annoying situation now!

 

How To Pay Off Credit Card Debt

Credit Card Debt

It is possible, with some actions, to reduce credit card debt and negotiate payment.

It is a mistake to think that operators do not want to agree on debt. For both you and credit institutions, renegotiation is beneficial. Here’s how to act:

 

Calculate Total Card Debt Amount

Debt Amount

To know how to get out of this, the first step is to know what the current debt amount is. Only after this calculation will you be able to measure the required efforts to settle it with the credit institution.

Knowing how much you owe, you can set a security amount to secure the payment.

 

Negotiate Credit Card Debt

Negotiate Credit Card Debt

Now you know the amount due and keep in mind how much of your budget can be committed to paying off credit card debt. Then it is time to contact the card company and inform them that you want to renegotiate the debt.

It is likely that, at this stage, the administrator will make proposals with high values. So make a counter proposal so that the installment is close to what you calculated to pay safely.

Still at this stage, some points deserve attention:

  • opt for fixed installments, even if they offer installments that increase according to the payment term, because this second option tends to have higher interest rates;
  • request the Total Effective Cost (CET) so you know exactly what is being paid: the amount of debt, interest, fees, taxes, etc.

Have you reached a valid agreement? Commit to payments only that credit card debt is paid off.

Didn’t find a viable trade? Look for another way to pay off the debt.

 

Get a loan to pay the card

Get a loan to pay the card

Yes, it may seem a little inconsistent to want to pay off one debt by borrowing another. But this alternative may be the most appropriate depending on the situation.

Advantages include interest rates, which can be much lower compared to credit card rates.

 

How Not To Get Into Credit Card Debt

Credit Card Debt

Just as important or perhaps even more important than paying off a credit card debt is not getting on the delinquent list. Or at least not come in again.

Check out our tips so you can keep track of your spending as smoothly as possible:

 

Reduce Card Spending

Reduce Card Spending

Before reducing or eliminating expenses, you need to identify them. Therefore, the first homework is to list your card expenses.

With this in hand, you will be able to identify which ones are really needed and which ones can be cut or reduced.

A good start may be to remove signatures from your credit card. Many times we don’t even realize that we are paying for a service because it comes monthly on the card statement.

So review if signatures of apps like Netflix and Spotify, for example, are really needed – at least while you’re paying off a debt.

Decrease the number of snacks or lunches away from home. Meals in restaurants, bars, bakeries and the like are becoming increasingly expensive for a variety of reasons. So, getting around eating out will positively impact your budget.

 

Don’t pay only the minimum

Don

Generally, the carrier offers two payment options for each invoice issued: full payment and a minimum payment, proportional to the total invoice amount.

It can be very tempting, but paying the minimum credit card bill is not a good idea.

Contrary to what many people think, the minimum payment offers no advantage to the cardholder.

When you make this type of payment, the unpaid amount is funded for the next bill, meaning it will still add up to the installment purchases on your card, and this could be the start of a big snowball of debt.

If you find that you will not be able to pay the full amount of your invoice, please contact your bank and request the installment payment. Generally, installment interest is lower than financing interest.

 

Lower card limit

Lower card limit

It can be hard to resist that big-screen TV promotion or smartphone model launched if your card limit is free.

So if you need extra help to contain your expenses, ask your service provider to lower your limit. This is a great option for organizing the budget and keeping track of the month’s bills.

Once again, we stress that the best way out is to have a good financial organization. Take care of your money and your budget, so you avoid unnecessary expenses such as interest payments.

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