How to treat the debt wisely


You must be realizing that a credit card is like a double-edged knife. Would be nice if we are wise to use it, otherwise, would be evil if used to go into debt in order to fulfill our wishes. Then what should be done so that we can immediately pay off the debt? Here is an example of a simulation of the repayment of a credit card. I hope this simulation can be useful to you. For example, suppose you earn around $ 4,000 per month and have 2 credit cards. You owe to the first credit card for $ 800 with interest of 3.75% per month and to the second credit card for $ 500 with 4% interest.

The solution to this problem is to set again your monthly expenses, and divide them into several categories, such as savings, taxes, transportation, housing, recreation, health, education, daily necessities, credit card payments, and others. Set aside the fund used to repay debt, for example, 30% of your total revenue. 30% is considered safe for everyone in living with debt.

Make a budget of revenue and expenditure as tightly as possible. You have to carry out the plan that has been made in a disciplined manner. You have to sacrifice some things, like shopping, so that the budget can be running on your planned track. During this process, you are also strictly prohibited to use a credit card. Never violate this rule because every violation will ruin all the plans that have been made. You must be discipline, don’t negotiate this.

Once you have established a fund to pay off credit card debts amounted to $ 1,300 / month, you need to gather data of credit card debts with their interest. This is useful step for determining which debt that is should be paid off first. You need to pay off credit card debt with higher interest first. In this case, you need to pay the debt of credit card B first. I think this step is best way to pay off credit cards.

Pay credit card A with minimum payment then reallocate the remaining fund to the credit card B. Do this step regularly, and then you will complete the debt on the card B and in less than 6 months. After that do the same thing for credit card A. The key are discipline and a strong desire to break away from the shackles of credit card.

You can also use what called debt rescheduling and debt restructuring. In addition to providing discounts, the card issuer can also perform time delay (debt rescheduling) or a reduction in the bill (debt restructuring). With the debt restructuring, you can ask the bank to provide easiness in accordance with the amount that is able to pay each month. Make sure you speak with the ruling authority to handle the negotiation. Write down the name and telephone number, then record your talking points. Make sure your voice is clear when doing negotiation, so the bank can know what you want.