Singapore has the highest GDP per capita of all ASEAN nations, but its citizens are not immune to financial distress. Many Singaporeans, especially young adults, have to climb a mountain of debt to reach the summit of financial freedom.
Excessive credit card usage is one of the primary reasons why many Singaporeans are in heavily indebted. If you can relate to this predicament, here are ways to dig yourself out of this hole:
Consolidate Them All
Taking out a debt consolidation loan in Singapore is an effective strategy to pay down your credit card bills more quickly. This financial product comes with a favourable interest rate, allowing you to exchange your high-interest debts with a low-interest one.
If you do not want to take the debt consolidation route yet, strongly consider a balance transfer. Most credit card issuers offer this service to achieve the same goal.
By combining everything you owe across numerous credit cards, you will only have to contend with one, albeit giant, bill. The beauty of it is that it can involve zero interest over a specified period. If you manage to zero out the balance within the interest-free window, you can rebuild your credit fast.
Avoid Having Too Many Credit Cards
As a preventive measure, it can help to reduce the number of credit cards you own. Having too much credit available for use can encourage you to spend beyond what is necessary. If you are already struggling to manage your finances, eliminating one or two tools for acquiring debt can be beneficial.
Do Not Maximise Credit Utilisation
Credit limits are not meant to be maximised. Although you can use them to the fullest, credit bureaus and lenders pay close attention to how much credit you use and how often you utilise it. To handle your credit card bills more efficiently, try not to depend too much on plastic.
Pay More than You Swipe
Buying things with plastic is not harmful to your credit as long as you repay what you owe. Credit card bills snowball when you swipe more than you pay every month.
It is responsible not to let unpaid balances roll over. Small balances can add up quickly because of interest, so avoid purchasing items that you can’t pay back come the due date.
Negotiate with Your Creditors
When all else fails, ask your credit card issuers if they can provide a manageable repayment plan for you. Believe or not, credit card companies are open for negotiation rather than watching your debt to pile up, for they gain nothing if you can’t at all.
Whether you can repay what you owe or not, seeking credit counseling helps. Some firms in Singapore provide advice about debt management, so you can learn tricks for managing your finances and using credit cards to maximum effect.
Loans are a double-edged sword. They hurt the irresponsible and bless the financially savvy. If you are the former, strive to bounce back and eventually turn yourself into the latter.