One of the most commonly available facilities from banks in the modern age of customer service is credit card offers. There are different grades of platinum, gold and silver range of credit cards that are available among many others. A sales executive will be able to convince you even if you are not a believer in credit facilities and card payments. This is aided by the fact that a very easy processing formality is also involved.
However, once you start swiping your cards, there’s nothing that can stop you from racking up outstanding credit amounts. Few are known to exercise control over the use of their credit cards and the number of times their cards are swiped for purchases of different kinds.
There is another reason for the incredibly high rates of outstanding debt. People are often fooled by the minimum amount due figures listed on monthly credit card statements. That’s for an emergency when you might not have enough cash. However, at the same time, the maximum amount of that minimum amount paid in interest charges and government taxes collected.
So, at the end of the month, your basic statement for outstanding principal will still be the same if you don’t even make any more purchases and expenses.
Credit card debt consolidation
It is necessary that you control the expenses of your credit card, as well as the payment due. A longer period incurs higher taxes and interest charges on your amount. Also, these are always at a high interest rate. Therefore, most of your money is used solely to pay interest charges. It is a matter of serious consideration as to when your payments will actually be completed.
This can also be a situation of mental stress and agony. However, there are also ways to avoid this overpayment and stress on your mind. You can consolidate your credit card debt with a loan from the bank where you have an account. This could also be against one of your term deposits or even a personal loan from the bank. Use it to pay off your credit card in full, then pay the bank in easy installments.
Let’s consider the advantages here. Every time you pay an amount as a credit card payment, there are several rounds of monthly deductions in the form of tax and interest payments. Ultimately, there is little for deductions from the principal. This is what causes the outstanding principal amount to remain unchanged even after months of payments.
On the other hand, when you are repaying a loan at the bank, there is an amount based on an annual calculation of the interest rate. The remaining amount is then deducted from the principal amount due.
Various companies and non-profit debt consolidation organizations are there to give you the ultimate help you need in the form of advice and guidance.