Debt can ruin your financial life and give you traumatic experiences when it goes out of control. If you incurred Credit card debt in 2020 and struggled to pay it off, then you must be in a deep financial crisis. But all is not lost. Here are ways to get yourself out of credit card debt in 2021. All you have to do is use the right tips and advance with hope no matter how challenging your current situation is.
How to get rid of credit card debt in 2021
It’s not the time to lose hope. It’s time to use the right tips to get yourself out of credit card debt in 2021. So, here we go.
- Analyze your current financial situation: Look at where you stand. List your credit card debts along with the following details:
- Number of credit cards
- Your total outstanding debt
- Your monthly payment amount
- Your minimum monthly payment amount
- Your credit card interest Rate
- Late fees and penalties
- Create a budget to generate free money: Create a personal budget to know where you are spending your money. Analyze your spending habits to determine if you are spending more than your income. Find areas where you can spend less to generate free money to pay your credit card bills. A personal budget can help you save money every month and navigate your way through the debt in 2021.
- Consolidate your credit card bills: You can consolidate your credit card bills with a debt consolidation loan at a low-interest rate. You can pay off your credit card bills with a new debt consolidation loan and then repay it over time. You can repay the new loan in easy instalments as the interest rate is likely to be lower than your credit cards.
You can also take out a personal loan and pay off your credit card bills. Just make sure that the interest rate of the new personal loan is lower than your credit cards.
It would be great if you can get a personal loan at a 0% interest rate from your friends or family. Then you can save a lot of money on interest.
- Negotiate with your creditors: You can negotiate with your creditors to lower your outstanding balance. Credit card companies know that many consumers are in financial trouble due to COVID-19. Plus, the Financial Conduct Authority (FCA) is already working with lenders to extend payment holidays by around six months. So, credit card companies are well aware of the situation now. So when they see that you are at least willing to pay some amount, they may offer a reduced payment plan to you. You may not even have to haggle a lot.
- Repay your bills with a new credit card: The average interest rate on a credit card is a bit expensive. When you make only the minimum monthly payments, the compounding interest increases your outstanding amount over time.
Transferring your balance from a high-interest credit card to a low-interest rate card can help you knock out debt while saving money. Browse online to find out the balance transfer offers in your area. Once you find a suitable balance transfer credit card, you can apply for it. Pay off your high-interest card with the 0% balance transfer card so that you do not have to pay any interest.
What does that mean? This implies that you do not have to pay any interest on the balance transfer card until the offer lasts. The 0% interest rate offer is usually valid for a fixed period. So, if you want to save money, you should pay off the balance within the introductory period.
Useful information
If you are in financial problems due to COVID-19 after effects, then you may take advantage of the following government relief programs.
Coronavirus Job Retention Scheme
Self-employed Income Support Scheme
Coronavirus Payment Holidays on Credit Cards and Loans (proposals)
A word of wisdom
Debt creates emotional stress. Chronic debt issues often lead to sleepless nights and anxiety. Please take care of your mental health. Avoid getting stressed over your unsecured debts. Stress won’t help to solve your debt problems. Speak to your family about the problem you are facing. Perhaps they can suggest a solution. The government is with you. They are trying to help you in whatever way they can. Plus, there are debt relief options. You can take advantage of them.
Conclusion
2020 was tough for many reasons. COVID-19, job loss, and pay cuts created a lot of financial problems for UK citizens. If you have fallen into credit card debt due to your money mistakes or COVID-19 induced financial stress, then use these 5 tips to get out of it in 2021.
Best of luck!
This post first appeared on Loans Introduced By Regulated Loan Broker, please read the originial post: here
