11 tricks to settle your credit card debt

27 04 2010

Credit card debt is the most common consumer debt most people will have trouble with. Since it is so dangerous to carry around a few thousand ringgits when you do your shopping, credit card is the perfect solution in terms of convenience and safety. In other words, you are also bringing with you a huge amount of money to spend. If your credit limit is RM10,000 per card and you have three credit cards, it is like having RM30,000 spare money in your wallet to let you spend instantly.

That`s the reason why most people has trouble controlling their spending habits. If you are one of the victims of this modern financial creation, see if the below tricks are useful to you.

Earn More Money

It is not a bad thing to fall into debt. Look at the positive side, it actually urges you and motivates you to earn more. Your current income is simply not enough to cover your desired lifestyle or needs.

Why I say needs? Some people own money not because they like to spend a lot. For example, expensive medical fees demanded by hospital when your old parent is hospitalized may be the cause of maxing out your credit limit.

The most practical and encouraged solution: EARN MORE MONEY.
Take up a part time job.
Start a business!
Increase your productivity!

Just make more money. Period.

Turn Credit Card Debts into Term Loans

Call the banks to seek for alternative. Instead of keep paying the not-so-affordable minimum payment, you can ask to turn the debt into term loans with lower interest charges.

Shred the plastic

To avoid using the card and keep on spending more, cut the credit cards. When it is out of sight, it is out of mind.

Use Debit Cards

I know credit card gives you convenience and safety, especially at petrol station. You can always replace it with debit cards.

Overdraft (OD)

If you have a property, such as your house, you can apply Overdraft facility to settle your credit card debt. OD interest is lower. Moreover, you can always pay it off earlier ,unlike term loan or car loan.


Be honest. Talk to your relatives and close friends. They will lend you the money if it is not substantial. You can spread the amount to several friends and relatives. Instead of paying 18% credit card debt interest, you can pay them slightly higher interest compared to Fixed Deposit rate.

Cut Expenses

This is the obvious thing to do.

Pay more than the minimum payment required

This sounds simple. But most people won`t realize that they had increased the credit card debt until the day they can`t even afford the minimum payment.

Balance Transfer Program

You can apply new cards that offer you low interest or interest-free period when you transfer balance. Instead of paying many small debts, consolidate them and only focus to settle one debt.

Insurance policy loan

If you have paid insurance premium for a few years, you can take out policy loan to settle your high-interest-debts.

Seek help from AKPK

AKPK is debt counselling agency by the federal government to assist you. They may be able to help you negotiate with the banks and solve your problem earlier. Don`t be shy to call them.

Do you realize that when you don`t need money, banks keep calling you to lend you more?
But when you desperately need the money, they are somehow reluctant to hand you the cash.
This is the reality.

So, how do you settle your credit card debts?
Tell us your success stories. Or you can also warn us with a bad example.



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