The interest on credit card revolving has always been a big problem for those who made debts with this form of payment. By paying only the minimum of the invoice amount (15%), the remaining amount would accumulate for the next month and here would come the snowball: interest would become increasingly expensive, increasing the debt.
To contain this often abusive practice, the rules have changed. In April 2017 it was determined that after paying the minimum of the card once, the following month the customer should receive a proposal from the bank to renegotiate the debt and avoid the accumulation of values.
Although this change slightly eases the interest rate of this type, many people still have old debts that have not entered the new configuration. How to get rid of them? In this post, you will find out the answer. Check-out!
Organize the finances
Regardless of whether your card debts are new or old, these debts should trigger the red light in your finances. It is therefore essential to take care of your budget so that default does not hurt your life and seizes what should be spent on basic expenses.
Start by setting up a personal spending spreadsheet. Understand how much you earn, what are the fixed and variable expenses (remember to round income down and expenses up, just a small change doesn’t change the planning). Scale how much is left to close accounts at the end of the month, and then look for ways to save.
By reducing your spending, even temporarily, your budget will gain new momentum and make it easier to pay off.
Seek the lender to negotiate the debt
With everything at the tip of the pencil, it’s time to look for the lender to debt negotiation. Current debts are already under the new rule and this process is automatic, but old ones have to go through this step.
Contact the card company and propose a negotiation on the amount and form of payment. Do not accept any proposal that is not really suitable for your budget, as you may end up even more indebted.
Negotiate with possible and appropriate values until you come up with a proposal that is beneficial to both parties.
Remember: if it goes to court, the lender will have to pay for a lawyer. So it is also interesting for him to give a discount and guarantee the payment of the debt!
Seek a lower interest loan
Currently, the loan has an average annual interest rate of 132%. This is a high figure, but considerably lower than the 338% per annum of revolving credit. Scary difference, right?
So getting a personal loan is a way to replace a more expensive debt with a cheaper one – which will give you tremendous relief! If you look for options with lower interest rates, such as Just offers, this possibility becomes even more advantageous. This is because the rate starts at 1.9% per month or 25.34% per year, depending on the profile of those who hire. Much cheaper right?
Once you have the money available, negotiate with the card company to repay all the debt at once, getting rid of the abusive accumulation of interest.
Beware of current debts
As credit card revolving interest rules change, current debts get a little less heavy. But just because they got cheaper doesn’t mean that there is no longer a maximum attention for you to pay everything on time and not end up with the dirty name, ok?
It is crucial to keep an eye on the relationship between present and old debts. Older women require more attention because they are usually more expensive. However, don’t let new ones pile up as this can mess up your entire budget.
It is very important that you adopt new spending habits and learn how to save even before you have to resort to card revolving or any form of loan. Combining savings, financial organization and old debt repayments, your financial success will be very near!