Maintaining a good credit history is a key to have an efficient financial credibility which helps in borrowing money from organized finance sector i.e Banks and NBFCs (Non Banking Finance Company). Every loan or a credit card application requires a credit check as an evaluation policy before lending.
Credit Cards are the fastest way to avail credit interest free up to 45 days. Credit cards come in handy for local and online shopping needs. But with financial constraints arising due to Covid 19 crisis, there is need to understand what happens if the credit card bills are not repaid. here’s a way to manage the situation. Failure to repay the credit card dues in time attract hefty interests. Here are some of the ways to manage the repayments.
A high Credit Card outstanding may take you several months to fully pay off the debt. Instead of letting the Credit Card debt snowball to unmanageable levels, you could transfer your balance to a low-interest Personal Loan. While you will still owe what is the outstanding, you will get more time to pay off the loan and at a much lower interest.
Remember to refrain from using your Credit Card to make new purchases when you’re servicing your balance transfer. Focus on repaying your debts first before taking on more.
No New Credit Cards
The tips shared above are likely to work only if you stick to the plan of clearing your old debts first before taking on new ones. Paying off Credit Card debt requires financial discipline and the will to see through the plan. Tackling your high-interest debts will free up more funds for emergency use as well as planning for your future financial goals.
Do Minimum Repayment
If you’re unable to pay your Credit Card dues in full, try to pay off at least the minimum repayment amount, if you can. This will ensure that your Credit Score doesn’t tank. A poor Credit Score will hinder your ability to be approved for loans in the future. Failure to make the minimum repayment results in additional late payment fees. If for some reason, you still cannot make the minimum repayment, speak to the bank to see if something can be worked out or if the due date can be deferred. If you’ve maintained a clean repayment record, banks are more than willing to help you with a temporary situation.