Credit card refinancing is just one way get out of debt-pits

Starting off with the timeless mantra, “borrow only what you can repay…”

Financial resolutions come and go; yet, everybody looks for a new beginning. ‘Tomorrow onwards, I will start tackling my debts efficiently’, for instance! If you are like any average Indian, we bet that one of those resolutions includes credit card refinancing to consolidate debts and repay them off. This way, it is easier to handle the debts with clarity. We don’t need to get into disturbing statistics to make a point because we all know credit card dues and EMIs form a vicious circle and you have been taken for the ride whether you like it or not. So let us discuss your options and solution via 4 tips below.

credit card

i. Be informed and stay informed:

If your debts and EMIs are all over the place, it may take some time to sort them out. Making a list (the amount, corresponding interest rate and tenure) may be a tad old-fashioned, but it always works. Tote up the amount as per the interest rates. Now you know how much to borrow to refinance them.

ii. Try to negotiate and bring down the APR (Annual Percentage Rate):

People are often reluctant to do this as they believe the rates are set in stone. Just talk to them and explain that you plan to settle the debts once and for all and if they can help you out. How underrated open communication is! Even if the lender refuses to budge, you can transfer the loan. Do ensure them that you don’t plan to prolong the total settlement.

iii. Bring down the expenses a little for now:

We urge you to cut down on a few indulgences. Don’t worry. It is temporary. Take advantage of credit card reward points, seasonal sales, coupons and discounts. A rupee saved is a rupee earned, after all. Once you are debt-free (even by 60%), you can splurge more.

iv. Don’t always pay the minimum EMI expected:

Sometimes you might be lucky enough to have some extra (bonus, less expenses, pay hike etc.) in which case, we implore you to focus on paying off as much extra as you can rather than investing in something else. Each extra rupee you put in goes to the principal, which will bring down the interest considerably.

 

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