If your credit card bill is in default, follow these steps to avoid high interest rates.

Every credit card company gives option to convert monthly bill into EMI.  India TV Money
Photo: PIXABAY Every credit card company gives option to convert monthly bill into EMI.

The festive season has started in the country. Many times people spend more than their budget due to attractive offers on credit cards. Because of this, some people are unable to pay and default (credit card bill default) when the credit card bill comes due. Later they have to pay huge interest. If you are also facing such a situation, you can easily get rid of high interest by adopting some methods.

Cash Reward Points

You get reward points for making purchases or spending money with any credit card. Many banks also allow bill payments with these reward points. In such a situation, if your credit card bill is higher than expected, you can use reward points.

Choose the EMI option.

Every credit card company gives option to convert monthly bill into EMI. Through this, you can easily avoid high interest if you default on your credit card. You can also pay the entire bill in monthly installments. Although, you will have to pay interest on it, it will be much less than the 35 to 45 percent interest charged after default.

Can take personal loan.

You should also consider a personal loan option in case of credit card default. The credit card bill must be paid with it. The advantage of this is that you will get rid of the 35 to 45 percent interest charged on credit card defaults.

Borrow against FD and Mutual Fund.

Any bank easily lends against FDs and mutual funds. Through this you can pay back your credit card debt. Interest on FD and mutual fund mortgage loans is usually up to 10%.

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