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5 Ways to Handle & Pay Off Credit Card Debts

Credit card is one of the valued assets but at the same time paying off debts has always been a problem for people in the UK. Hopefully, you are having a credit card of your own and purchase goods with its help. This is where the credit card debt comes into the picture. 

Here, you will be able to get all the details of what to do and what not to do when you are struggling with credit card debts. On the other hand, you will also get all the information regarding the credit card companies in the case of missing credit card debts. 

  • Always avoid Credit Card Debt Trap

The credit card is the electronic medium of borrowing money. After picking the money, you will get a certain amount of time to return it, of course with interest. The credit card debt trap can occur when you are using it for your everyday living. The debts can increase to thousands and lakhs, and this is known as spiralling into debt. 

That is why make use of cash and debit cards. Always try to use credit cards in an emergency situation. According to the experts, you must always deal with the outstanding money in a perfect order. Never allow it to increase that amount where you have to face hectic situations.

  • Maintain the APR

The APR stands for the Annual Percentage Rate. All the credit card companies in the UK have this quote. Whenever you are buying a product with the help of a credit card, then of course you will have credit card debt, but on the other hand, you can compare the products. The comparison will only depend on the annual percentage interest. 

The annual percentage rate works with the total amount of interest that you will pay. In the case of any additional charges, it will be taken by the credit card company, monthly. After that, depending on the product that you buy, you have to calculate, and then pay off the credit card debt. 

  • Reducing the Credit Debt 

The transfer of balance has the ability to reduce credit debt. There are many credit card companies in the United Kingdom that offer 0% interest to transfer the unpaid balance to their cards. This rate of interest works as an incentive. When you are having a large amount of balance on the credit card and paying interest as well, then the transfer of the balance will come in handy. 

Before transferring the balance from one card to another, make sure that you fill up all the necessary forms. In addition to that, also maintain all the formal procedures as provided by the credit card company executive. If you are not interested in transferring the balance, then there is no point in getting a new credit card. 

  • Give away the Transfer Fees

There are some credit card companies that will help you by taking over the transfer fees. For transferring the credit balance, you need to provide a certain amount of fees as a charge. Not only this will eliminate the credit card debt, but you will also feel relaxed, as there will be no trouble in the debt repayment. 

  • Utilize the Store Cards

The store cards are such kinds of items that act as a coupon, so always try to make use of it. Whenever you are going to spend through the credit card, make sure you keep it by your side and utilize all of these store cards that you have. Some of the store cards have a high rate of interests, therefore, it’s better not to use them. Generally, most store cards offer discounts on the very first purchase, so it’s better to go for it, right away. 

What can be the Alternatives to a Credit Card?

You can have a lot of money at a time if and only if you save it for a longer period of time, little by little. If you think rationally, then having a credit card is not that mandatory. If you are willing to buy an expensive item, then the planning must be done for a long time before. What’s the point in buying an expensive item in credit and later stress about paying it off as the credit card debts.

A Savings Account 

Most of the banks in the United Kingdom offer a savings account. You can easily open it with zero balance and also get a certain rate of interest on the principal amount, every year. Whatever your income is, apart from keeping the mandatory expenditure aside, you need to save some amount of money. And, after that, deposit it into the savings account.  

According to experts, NS&I is one of the best and safest options. The National Savings and Investments is directly regulated by the government and thus your money will be safe. If you are willing to open the savings account on your own, then the Individual Savings Account will be just more than perfect for you.

If your age is between 16 to 18 years, then there are certain facilities to open a junior savings account. Before opening this type of savings account, make sure you read all the guidelines, terms and conditions to proceed further. 

Build Up a Budget

You will obviously know how much you earn per month and what the expenses are. Thus, creating a personal budget is very much mandatory. This will help you in keeping the limitations in the field of monthly expenditure. As a result, the savings will be eventually deposited into your savings account. 

What if you cannot pay the Credit Card Debt?

There is a high risk of sentencing you to prison if you are unable to repay the credit card debt, however, the situation is quite rare Generally, people find out a way to repay their debts. Things get more and more complicated in the case of criminal fines and debts that belong to the government. 

Right to Negotiate 

You have every right to negotiate with the credit card provider, regarding the debts. When your financial situation has deteriorated, inform them and state all the details. Thus, negotiations can become successful. They might give you a good amount of time to gather the funds. In between the period, you might not have to pay anything. After the given time is over, you have to pay the entire debt amount in the full and final settlement. 

Your Credit Score

Yes, your credit score is going to get affected due to the delay in making payments. Usually, the credit card company will share all the information with the credit reference agencies. Leaving the credit score aside, the other creditors will also understand that it might not be fruitful to lend you money in the future. 

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