• हिन्दी
  • ગુજરાતી
  • বাংলা
  • తెలుగు
  • मराठी
  • ಕನ್ನಡ
  • money9
  • Insurance
  • Saving
  • Loan
  • Mutual Funds
  • Investment
  • Breaking Briefs
downloadDownload The App
Close
  • Home
  • Videos
  • Podcast
  • Banking
  • Bulletin
  • Gold
  • Healthcare
  • Real Estate
  • Tax
  • Travel
  • Breaking Briefs
  • Insurance
  • Savings
  • Loan
  • Crypto
  • Investment
  • Mutual Funds
  • Real Estate
  • Tax
  • Exclusive
  • Home / Banking }

Smart ways to get rid of credit card debt trap

  • Ankur Sengupta
  • Last Updated : October 2, 2021, 14:42 IST
  • Follow
Smart ways to get rid of credit card debt trap
India's largest private sector bank HDFC Bank on September 29th, had announced that it would revamp three of its existing cards to offer more to customers, as it looks to regain its lost market share in the next three to four quarters.
  • Follow

Credit cards are really helpful if used judiciously. But if used recklessly, it can easily lead one into a debt trap. The rate of interest and penalty are the highest in credit cards. The minimum is more than 30% annually. So, paying credit card bills in time is strongly advised by all investment advisers. But what if one falls into credit card debt trap? Money9 offers a few tips to get rid of it.

Smart EMI

All credit cards offer attractive EMI option to customers. If your outstanding amount is getting big, then opt for smart EMI option. If you opt for smart EMI option, you can pay small amounts every month and no extra interest, or penalty, would be charged.

Suppose if you have an outstanding amount of Rs 50,000 and you opt for a tenure of six months to pay up. Then you have to pay Rs 8,400 per month without any extra penal interest. It will ease your credit card burden.

Balance transfer

Credit card balance can be transferred and shifted. For instance, the outstanding money or the dues on a credit card can be transferred to another card. The balance transfer method lets you shift not only from one card to another, but also multiple card dues to one card.

According to experts, to ease credit card dues, one can use the balance transfer method. With the transfer, the cardholder gets a fresh credit-free period of up to 90 days, to repay the amount without adding further interest on the due amount.

Taking a Loan

By taking a personal loan, one can repay the due amount. Though this is not a good practice, it could save you from sinking in debt. If you are deep down, you can always explore multiple options to repay the dues quickly and at least cost.

The utility of personal loan lies in the fact that these loans carry an interest rate of around 11-20% while credit cards charge rates ranging from 35% to 45%.

Top-up Loans

This is another type of loan you can opt for, other than a personal loan. You can go for a top-up loan only if you have an existing personal loan. Once you apply for the loan, the lender conducts due diligence and approves it.

You can easily get approval for a top-up loan, if you have been regular with your existing loan payments for two years or more successfully. You can use this money to pay off your credit card debt at one go.

One by one

With this sequential method, you can pay off your credit card dues steadily one after the other, easing the repayment burden. You could opt to clear off smaller dues first, according to experts, as even clearing balance from a single card will help you improve not only your credit score but also the credit utilisation ratio.

Break the investments

This should be the last option that you should seriously consider. If you are unable to pay the dues, you could withdraw money from FDs or other low earning investments to pay off the credit card debt.

However, this cannot be done on a regular basis, or else you will not be left with any savings for an emergency purpose in future.

Published October 2, 2021, 14:42 IST

Download Money9 App for the latest updates on Personal Finance.

  • credit card
  • Credit Card benefits
  • credit card EMI

Related

  • Here’s why you have all the right to return Rs 2,000 banknotes to RBI even after Sep 30 deadline!
  • Three banks penalised for non-compliance
  • IDBI Bank again extends Amrit Mahotsav FD
  • Kotak Mahindra Bank hikes fixed deposit interest rates
  • Early warning system on defaulters making deals
  • Yes Bank revises RoI on FDs to 7.75%; but where can you get even more?

Latest

  • 1. How Amazon, Flipkart use dark patterns to lure you!
  • 2. Don't Get Swamped By This!
  • 3. How can you find whether you have malware in your device?
  • 4. This Deed Can Give Peace of Mind!
  • 5. How much overvalued is Nifty right now?

Trending 9

  • e-gaming companies might face tax demand of Rs 1.5 lakh crore
    1 e-gaming companies might face tax demand of Rs 1.5 lakh crore
    The total tax demand on e-gaming companies might climb to a height of Rs 1.5 lakh crore, claimed a report in the Business Standard.
    Tax
    alternate

    Read

  • 2How multicap is different from multi-asset allocation fund
    Investment
    read_icon

    Read

  • 3How to prepare portfolio of F&B shares during festive season
    Stocks
    read_icon

    Read

  • 4How should you utilise bonus of your participating insurance policy?
    Insurance
    read_icon

    Read

  • 5Investment Reflections from Lord Ganesha
    Investment
    read_icon

    Read

  • 6Premium listing of EMS
    Exclusive
    read_icon

    Read

  • 7What is the ideal way to ensure children don’t get into property dispute!
    Property
    read_icon

    Read

  • 8Govt bonds in JP Morgan’s bond index could also support Indian currency
    Economy
    read_icon

    Read

  • 9What’s happening on India’s employment front?
    Exclusive
    read_icon

    Read

Exclusive

Identify your risk through a risk-o-meter, but don't make it the sole criterion
Identify your risk through a risk-o-meter, but don’t make it the sole criterion
Mutual Funds
read_icon

Read

No credit card? Pay shopping EMIs via debit cards
Exclusive
read_icon

Read

Investing in Inflation: How to Grow Your Wealth Amidst Economic Challenges
Exclusive
read_icon

Read

Frequent train traveller? Rules you need to know
Exclusive
read_icon

Read

The dark alleys on online shopping!
Cyber security
read_icon

Read

  • Trending Stories

  • How should you utilise bonus of your participating insurance policy?
  • Corporate participation in NPS at 12-month high: NSO
  • e-gaming companies might face tax demand of Rs 1.5 lakh crore
  • Govt securities of 50-year tenure highlight in borrowing target of FinMin in H2 of FY24
  • Identify your risk through a risk-o-meter, but don’t make it the sole criterion
  • TV9 Sites

  • TV9 Hindi
  • TV9Telugu.com
  • TV9 Marathi
  • TV9 Gujarati
  • TV9 Kannada
  • TV9 Bangla
  • News9 Live
  • Trends9
  • Money9 Sites

  • Money9 Hindi
  • Money9 English
  • Money9 Marathi
  • Money9 Telugu
  • Money9 Gujarati
  • Money9 Kannada
  • Money9 Bangla
  • Topics

  • Insurance
  • Savings
  • Loan
  • Stocks
  • Mutual Funds
  • Real Estate
  • Tax
  • Crypto
  • Exclusive
  • Follow us

  • FaceBook
  • Twitter
  • Youtube
  • Instagram
  • Linkedin
  • Download App

  • play_store
  • App_store
  • Contact Us
  • About Us
  • Advertise With Us
  • Privacy & Cookies Notice
  • Complaint Redressal
  • Copyright © 2023 Money9. All rights reserved.
  • share
  • Facebook
  • Twitter
  • Whatsapp
  • LinkedIn
  • Telegram
close