Credit card debts are hard to consolidate as the bank keeps on adding up interest rates on the debt amount every month. So even if one decides to pay a portion of the debt every month, the interest amount spells a doom on the subtracted result anyhow. Hence, paying off the credit card debts in the scientifically and mathematically proven method is something that can be of great help for the credit card debt holders. Before getting along with the methods that can be used for consolidating the credit card debt, there are some precautions that one must follow. Normally when people land up having huge debt on the credit card, they usually get in to a panic mode and takes decision that can prove to be harmful in future.
- One must not declare bankruptcy without proper guidance and calculation as it might cut down on all the debts but then it would also harm the cibil score and one would not be able to file for any further loan in near future no matter how crucial it would be. The applications would get rejected or it would be a huge loss as the lender would tag highest interest rates on the loan amount because the person with bad cibil score is considered to at high risk for lenders.
- Cancelling or blocking the credit cards would also effect the cibil score and the person would not be given any further cards for use. The interest rate would keep adding and would become huge enough to be paid.
In order to know more about the dos and don’ts of credit card debts one can click here. The methods in which one can get free from credit card debts includes in two ways that have been proven profitable mathematically. Anyhow, one must consult a professional at the national debt relief before taking a step further but knowing about the methods can help one relax a bit from the panic situation.
- Snowballing technique for debt consolidation- it is the process where a debtor is advised to list down all his outstanding bills in an order where the bill that has the maximum interest amount would acquire the top position and then other would join the list in an ascending order. Here, the debtor first pays the minimal bill and then moves in the ascending order and get rid of the bills one by one. This method is beneficial because when a person pays the first bill, he actually then has some more amount than before to pay the second one and the same calculation continues. The method is called snowballing because when the snowball moves downhill it gets bigger and gains momentum as well just like the amount.
- Debt stacking technique- it is snowballing in the reverse order. This method is difficult as one needs to do everything possible to pay the maximum interest bill at first and then can pay the rest after that but then this method is suggested as it ends up saving a lot of money on the debtor’s court.