Credit card related debts are usually a sign that your budget has not been up for a while.
And if this lack of planning is maintained for a longer time, you have a good chance of spending much more than you receive monthly. And what does that mean? Suddenly, you see yourself inside a large snowball. The interest rates for these debts are among the highest in Brazil.
To get out of this kind of ambush without significant help is getting harder and harder.
Do you know which is the best option to clear debts? The best alternative is to be able to replace the debt, with higher interest rates, for one that has lower interest rates. It may seem a bit strange, but Good Credit will make you understand the next.
The revolving credit card currently has interest with an average of up to 334% per year. Many institutions will be able to offer credits that start with amounts of up to 25% per year. Here’s how it is possible to pay off credit card debt through personal loan.
Is it worth getting out of debt by getting another debt?
The credit card is a modality that assists the life of the majority of Brazilians. But he is also responsible for one of the biggest debts in the country.
It is with the credit card that the individual gains the facility of parceling their purchases. Through so-called plastic money, we often end up buying a lot more than we earn.
Because the money is not spent on the purchase, many people end up buying more than they should, acquiring heavy debts with the operators of their cards.
Time is running out, debts are increasing, and people who have more cards can not find a way to reconcile what they earn monthly with what they end up spending on all their bills.
The financial market has a large supply of credit cards, and those who have no restriction on their behalf end up having advantages in the midst of so many options.
Every new debt the consumer contracts, it becomes more complicated to get out of a process that, in most cases, takes you even further into the hole.
Credit Card Rates x Personal Loan Rates
The interest on the credit card , on average, is around 17%. Meaning that bills that are paid off partially, quickly, turn into snowballs of interest. Not to mention that card operators still charge different fees on the amounts that will be paid in arrears.
In the personal loan, interest rates are around 4% to 8% monthly. That is, it is much more worthwhile to acquire a debt with this amount of interest, than will be charged through the card companies.
How does this exchange work?
With a few simple tips, you will understand how simple it is to repay credit card debt with a personal loan.
First, you need to make a survey of how much your debt really is. Make an analysis with the institution or operator of your credit card and get the total of how much you really owe.
Another very important point is to apply for your personal loan at the same amount you are really owed. Nothing to ask for a higher amount, as this will make you pay unnecessary interest, and that’s certainly not the plan.
Compare all available rates and always opt for the best offer, that is, the one that is most compatible with your budget.
The next step will be to negotiate your debt . The same day that the loan falls on your account, you should contact the card operator and negotiate the full amount of your debt.
Do not forget that you will have the bargaining power in hand, which means you should ask for good discounts to pay cash. And the amount left over, you can pay other debts you may have incurred, or even save so that it can be used on your next bills.
Learning to control your future expenses
Once you are more relieved by the situation, you will need to arrange to be able to repay the installments of your personal loan. One must understand that the loan is a debt, just like the credit card.
It is fundamental that you organize yourself, avoiding the delay of payment of your installments and, thus, managing to keep your financial health always up to date.
You will need to rethink your spending, if possible, make cuts in unnecessary spending and learn to balance between what you actually earn and what you are spending.
A spending spreadsheet can be very helpful to keep finances in order and you can download the free expense spreadsheet template we prepared!
It’s no use asking for your personal loan to repay an old debt and wind up reeling in a new one. You need to be aware of what you really need. And go in search of an alternative to finally get out of the red and have a fresh chance to regain the well-being of your financial health.
Do the math yourself. Review the rates available at the institutions that offer personal loans and the interest rates that are being charged by the credit card companies. You yourself will see clearly how it is advantageous to effect this exchange.