Getting into a debt trap?

Me, getting into a debt trap? Never! Most of us think we can manage our money, and whilst juggling it around, sometimes ignore the warning signs that could drive us into a debt trap! We bring you some eye openers, that may jolt you out of a false sense of security!

Okay, so you are not late paying your credit card dues, even if it is only the bare minimum, and you do pay your bills on time. Could you still be heading towards a debt trap?

Credit Card Debt….

You only pay the minimum amount due, on your credit cards
You use your card to buy day to day necessities like groceries, vegetables etc
You revolve your credit often by availing of the balance transfer facility
You possess several credit cards
You withdraw cash against your credit card, even if it’s not an emergency
You are close to the maximum limit allowed on the card
You are not sure about the exact outstanding amount you have on your cards
Other Warning Signals…

You have no savings
You are left wondering where all the money goes
You don’t maintain accounts
Your spend is greater than the income
You spend on impulse
Strategy for clearing your debts
If you are in debt, the first thing that can happen to you is loss of self-confidence. Avoid this by taking charge of the situation.
List out the debts and plan carefully to repay them.
Pay off debts that incur a higher rate of interest eg. cash withdrawls on credit card
It may be easier to pay off small debts first, but focus on the rate of interest and pay off the debts with high interest rates first.
If you have taken a balance transfer facility on your card, it usually comes at 0% interest for 3 months. Divide the amount by three and pay it off in three months flat.
If you can borrow at a lower rate of interest, use that money to clear debts, which incur a higher rate of interest.
Learn to save some amount every month. This can tide you over before you go under.
Remember, the sooner you act, the better! You can certainly turn your finances around, with a little effort, and proper planning. It’s up to you, would you rather remain “in-debted” or get your act together and snap out of the situation fast enough!