78% of individuals struggle to settle credit card bills by the month. Why? There could be multiple reasons behind that. You may drop it due to unemployment, income slash, emergency, etc.  Experts advise a financial cushion. Having additional savings just for unexpected needs ensures financial stability. However, analyse the amount you can pay.

Consult your credit card provider and discuss. It is better than doubling up the interest and penalties. The card company may provide an alternative payment structure. He creates one according to the individual’s current financial potential.  The blog lists the best actions to take if you struggle with credit card debt.

5 strategies to Settle Credit Card Dues Quickly

Don’t freak out after encountering a whopping credit card debt. It would not help you settle it. Instead, take the first step. Calculate the total amount you owe on credit cards. Consider the interest and penalties. It gives you the final figure to pay.

Also, check whether the company charges late fees or other expenses. It will help you plan the payments accordingly.  Calculating the total amount presents you with vague figures.  It helps identify the debt payment timeline. Here are the next steps to follow:

1)     Identify the amount you can pay

Acknowledging your debts, the interest and penalties give a vague number. It is the number you must settle to run debt-free. The costs may increase if you forget to add other costs. So, always consider a flexible number instead of going strictly by calculations.

For example- if you owe €4000 as per your calculations, aim to save at least €5000.  It will help you avoid last-minute panic and settle dues comfortably. However, life is easy for everyone. Some individuals may struggle to pay all at once. Re-calculate the amount you can pay.

2)     Contact your creditors

Knowing a vague figure grants you clarity on the payment potential. Improvise and check whether you can pay beyond the specific amount. You can tap other income sources to settle the debt. It could be dividends, income from rent, part-time pay, etc. Most individuals forget their additional income if they are in debt. Thus, tapping such sources may help you clear the debt. If not full, you can settle at least 70%.

Alternatively, contact your creditors if you cannot pay beyond a specific amount. Tell them the reason with the bank statements proof. Individuals facing pay cuts or unemployment may do that. It backs your story with concrete proof. 

One struggles to settle any debt with a low income. The creditor may help you with an alternative payment plan. Plan and budget the instalments according to the new plan. Sometimes, it is challenging to stick to a budget and save. What if you need money urgently to counter a medical need? It leaves you with limited financial flexibility and affects payments.

How about dealing with the situation the other way?

You may get verified loans in Ireland as an unemployed person. Individuals with a decent financial history and income may get one. Yes, provide reveal part-time income proof. However, it must be a reliable income form.  Most loan companies help low-earning persons counter cash emergencies. You may get one even without a regular income source. However, you must repay it with comfortable loan instalments.

3)     Confirm the debts you own

One should always check the dues that they own. Sometimes, you may see a wrong entry or a debt you don’t know about. You may not be responsible for the debt if you don’t share a joint account. Alternatively, individuals having a joint account may be responsible. You may not know about it, but you must pay for it. It is if the other person doesn’t pay it.

Moreover, you must pay if you are an additional cardholder. It is only if you share the legal agreement that you do so. If you don’t have it in writing, avoid it. The company cannot chase you there. However, if the credit card provider still does it, reveal the proof.  If you don’t get the answer, contact the higher authority. You may post your complaint, and they will act accordingly.

Now, owning the debt frees you from the responsibility of paying. Alternatively, you can get away by paying a portion (if the creditor insists).

4)     Consider a 0%APR introductory card

Individuals needing extra time to settle their credit card debt may benefit. The 0% credit card doesn’t charge any interest rate for the introductory period. It usually lasts for 12 months or longer. Under this, the person may encounter two ways to settle the debt. The first one is through balance transfer. You can put the balances from different credit cards into just one card.

 It saves you interest costs of about 20%! However, you must pay the balance within the timeline. If you fail to do so, then it may lead to additional penalties. Besides that, it is ideal for individuals with consistently good incomes. If you have a sufficient cash balance by the end of the month, you can benefit from this.

However, individuals with low income may not benefit from it. It, instead, may prove troublesome for you later. You can get better ways to settle the dues without issues. Check affordable loans for bad credit scores. Individuals with pending debts struggle to finance their needs. Thus, identify the amount you need to settle the dues. You may get at least an approximate amount for the needs. It is safer than a 0% interest credit card. You always know the amount to pay by the month's end. However, ensure regular payments to avoid surprises.

5)     File for a Notice of Correction

It is a legal notice that a person with a credit card debt may send to creditors. However, you can only do so if you missed payments due to circumstances beyond your control. It could be a recession, job loss, or sudden accident/disability. The notice explains your situation to the creditor.

However, the notice of correction may not help much. It is ideal for individuals missing 2-3 payments. Individuals paying credit card debt late may not benefit from this. Alternatively, the genuine cause may win you an additional credit limit. It safeguards your finances and credit score. You can utilise it to improve your financial status and settle debts.

Bottom line

These steps may help if you cannot pay credit card dues. Determine the total amount you owe. Identify your savings, income and liabilities. It helps to know the amount you can comfortably pay.

Discuss your situation with the credit card provider. Tell him the amount you can repay and the situation. Alternatively, check balance transfers or file a notice of correction. It may help you halt the payments for some time. Identify the best aspect according to your finances and situations.