Pawnina Tips: How To Save Yourself from Credit Card Debt

Pawnina Tips: How To Save Yourself from Credit Card Debt

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Hi guys, Pawnina here! There are at least 7 million actual credit card holders in the Philippines as of 2015, according to data from the Credit Card Association of the Philippines and statistics from the Bangko Sentral ng Pilipinas reveal that credit card debt in the country reached P157.34 billion in 2014. A really alarming figure considering that Filipinos are averse to credit cards.

These wallet-sized shiny plastics hold great purchasing power, and with great power comes great responsibility. While credit card can be a good source for immediate cash, it is still money you owed from the bank. Being irresponsible with managing your credit card debts can mean dire consequences. For those indebted by the cards, take the time to read smart tips from moi to liberate yourself from credit card debt!

1. Resolve one debt at a time.

Carrying more than one credit card debt can be so heavy in your near-empty wallets. What you have to do is to resolve one debt at a time. It is advised to pay at least the minimum on each card and there at one of two ways you can focus later on. The first way is to check the interest rate of your credit card balance statement to determine which credit card charges the highest interest rate then focus on paying that debt off before others. The other way is to pay off the card with the smallest balance first.

However, if you are looking to take care of your credit score, go for the first method.

2. Try to pay more than the minimum.

Paying the minimum balance will give you temporary relief but this can be a credit card mistake! It can do more harm than good. In fact, you will rack up bigger interest charges, paying down your debt may take longer and it will affect your credit score. You don’t want all of that in your plate. Take note that the smaller your balance, the less you’ll have to pay in interest. So as much as possible, try to pay more than the minimum, pay as much as you can.

3. Negotiate with your credit card companies.

Some creditors have the heart to understand your financial situation. So it is not bad to talk with your creditors and make a request. If successful, they could lower your interest rates or waive your current late fee balances as well.

4. Never ever close your cards with existing balances.

If all else fails, don’t ran away from your debt. Don’t make it to a point that the company close your cards, it will do horrors to your credit history. Credit card has some wonderful perks if used the right way [Read: Pawnina Shares: The 7 Wonderful Perks You Can Enjoy With Good Credit History]. But if you are planning to stop using a credit card, you have to pay all your balances and make sure that the company records show it was you who requested to close your credit card. Do this by writing a request letter.

5. Check if you can liquidate stuffs to minimize your debt.

It’s time to be practical here! Check whether you have valuable items at home where you can convert in into cash. A number of ways to do it includes selling it or pawning it. If you choose to sell it, you can pull off a garage sale or ask your friends on social media or post it online anyway. On the other hand, you can pawn your big ticket items at some pawnshops near you. If you’re pawning a jewelry, then great, you can get that cash you need from the pawnshop. However, the downside would mean you repaying the loan with high interest charges. Don’t worry, there’s an online pawnshop with a low interest starting from 2.99% that also accepts more than just jewelry. You can pawn your gadgets, designer bags, luxury watches, electronics and even cameras!

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Use other credit card alternatives.

Getting your first credit card may feel like you have stable income, but know that with the perks of using a credit card, there comes also the risk.

If you come to a point of flipping the coin to the acrid side then there are other friendly credit card alternatives that you can try [Read: Friendly Credit Card Alternatives That Financially Savvy Filipinos Could Use].

Try PawnHero!

Yes, a credit card is your emergency bank in hand, but if you don’t have one yet, you can always turn into PawnHero for extra cash. Just visit the website to learn more. Also, do try and download the PawnHero app for a quick and easy experience. Plus, if you’d want to go online shopping, check out Marketplace.ph, where authentic and preloved branded items meet bargain prices. The online shopping store accepts cash on delivery and other payment methods of your convenience.

Do follow PawnHero Philippines and Marketplace by PawnHero on Facebook for updates, games and cash rewards.

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Pawnina Bayani

Pawnina Bayani loves to shop, dine, and travel. She lives in a small yet cozy apartment with her cats and dogs. Her goal is to live life to the fullest, while still fulfilling her responsibilities. As a contributing writer for PawnHero, Pawnina brings tips and tricks on budgeting and saving, as well as practical advice on life and anything under the sun!