Interest Breakthrough - Mastering the Optimum Debt Ratio

Banks are selling credit cards like cabbage, so should consumers buy credit cards like cabbage? The answer is of course no. More credit cards are not always better, nor is your credit limit better. Nowadays, young people’s wallets are getting thicker and thicker due to various bank promotions, most of which are credit cards. Whenever they swipe a card to make a purchase, they may randomly pick out one card to pay, and then change to another card when the credit limit is exhausted, which is the most chic thing to do. As a result, it is easy to cause consumption to exceed one's actual payment ability, and the mixed use of multiple cards can also easily confuse the different repayment dates of each card, resulting in delayed repayment and additional interest expenses such as late payment fees and penalty interest. Therefore, from a financial perspective, you might as well remember a few small principles.

1. The total loan repayment shall not exceed 70% of the total income. Of the monthly income, 70% can be used for current expenses, 20% can be saved to cope with unexpected emergencies, and the other 10% can be used as premiums to supplement social security deficiencies through commercial insurance. Calculated in this way, the total monthly loan repayment, including mortgage and credit card payments, should not exceed 70% of the total income. If your mortgage already accounts for half of your monthly income, the credit card consumption limit should be controlled within 20 yuan. For example, if your monthly income is 5,000 yuan, then the monthly credit card payment amount should not exceed 1,000 yuan. Otherwise, if you are in debt that month, you will easily continue to be in debt next month. Part of your future income will be used to repay past expenses, and you will have no money left to live a good life in the future.

2. Card debt should not exceed half of the credit limit. Due to the fierce competition among banks, when banks review credit limits, in order to promote revolving credit, the credit limit is often relatively high, and some may even exceed two or three times the income. For example, if you have no fixed income and only rely on your parents for financial support. College students can also get credit lines ranging from 2,000 to 5,000 yuan. If they use their credit cards within this range, they will unknowingly use their revolving credit and only pay the minimum monthly payment, falling into the "trap of 18% annual interest" ". Therefore, it is important to calculate the monthly repayment amount, and controlling the monthly credit card debt to no more than half of the credit limit is also an appropriate self-protection measure.

3. Try to pay off consumer loans within one year. From a financial management point of view, as long as one month's expenditure exceeds income, it becomes a liability, and part of future income will be used to repay past expenditure, so debt should not be delayed for too long. Generally speaking, for consumer items paid with credit cards, it is best to repay the consumer loan within 3 months and up to one year, otherwise it will have a certain impact on long-term financial planning.

To break through with multiple cards - you must be good at applying for cards but also good at canceling them

I often hear people say that it is so tempting that it is almost impossible to control it! Credit cards often come across as pie-in-the-sky. Waiver of annual fee for the first year is the basic benefit, and additional benefits are rich and colorful. We do not object to the practice of applying for a card to get gifts, but it is important to remind you that if you are able to apply for a card, you should also learn to cancel the card. Once you get the gift you like, please carefully study the relevant preferential terms and cancel the card as soon as possible. For example, you can swipe your card at the supermarket to buy a bottle of mineral water, then get your credit card sign-up gift—a Pizza Hut delicious meal voucher, and then call the service hotline to inquire about refunding the card. At present, the procedures for canceling cards in various banks are relatively simple. You only need to pay off the credit card balance, make an application in telephone banking, and then cut off the credit card yourself. Some banks may also need to recycle the card, and the cardholder will need to visit a branch. Otherwise, not only having multiple credit cards in your wallet will increase the risk of overdraft, you will also easily skip another repayment year and increase unnecessary annual fees.

Use a card to break out - how to avoid heavy fines

As the old saying goes, if you often walk by the river, how can you avoid getting your shoes wet? If you use your credit card too much and for a long time, there is no guarantee that one day you will be charged again by the bank, either in the form of interest or penalties. The way to avoid wet shoes is also very simple.

1. It is related repayment. That is, automatic repayment from linked accounts.

You can link your credit card account to your salary account and automatically transfer money from your salary account to your credit card account every month. This way you can avoid interest payments caused by late repayments. College students can also link their credit card accounts to the accounts their parents use to store their pocket money, thereby enjoying interest-free benefits and ensuring that they will not be penalized. What needs special reminder is that when repaying by linking accounts, cardholders need to always pay attention to the fund balance of their repayment account, because once the balance is insufficient to repay the credit card debt, the minimum repayment amount will be automatically deducted to form a cycle. If the long-term balance is insufficient, various fees such as late payment fees, penalty interest, and recurring interest will be incurred, which will increase the repayment burden.

Two. Use installment payment with caution. With the name of "interest-free" and "everything goes", installment payment is becoming a new consumption method, especially popular among college students with no source of income. Installment payment increases the credit limit of the credit card in disguise, and also greatly expands the space for overdraft consumption, which can easily make these cardholders with insufficient actual spending power fall into a cycle of repayments. However, although it is interest-free, each credit card installment payment will be charged a varying amount of handling fees. The longer the term, the higher the handling fee. Therefore, even if you use installment payments, it is best to pay off the debt within 3 months and up to one year to avoid putting the debt into the second year. The three-month installment is basically within your repayment ability, and it is not easy to fall into debt. On the contrary, if the delay is longer and handling fees are attached, the "snowball" will get bigger and bigger.

Debt Breakthrough - Three Steps to Save Yourself and Restore "Freedom"

Since you are burdened with debt, "self-rescue" must be a painful and complicated process, but you must not "break the pot". Card holders have evolved into "old people". China does not have a personal bankruptcy law. Once you become a "bad guy", the bank may follow you anywhere at any time, adding pressure and shadow to your family. What's more, credit card repayments are directly related to the credit status of the cardholder, and personal bad credit records generally remain for many years, which directly affects future car and house loan purchases. Therefore, it is more important to relax your mind. Cardholders should calm down, carefully analyze the causes of debt, and find ways to pay off debt based on their asset status.

The first trick: Reduce living needs and increase income as much as possible

This is the most basic trick. Save the money for a cup of coffee every day and save the money for taxis when going out. , save money for travel, and financial management life has evolved into a theme - paying back money. "Reduce consumption, minimize living needs, just be able to live, save money and pay off debts as soon as possible." Some cardholders said this. What is more important than reducing demand is not to add new debts, nor to increase consumption, so take out the scissors and cut off all credit cards! In addition, increasing income is also the basic principle of debt reduction. You can do odd jobs during your spare time from normal work, or use the Internet to auction things, which are all good ways to increase your income.

Second move: Borrow low to pay high, extending the repayment period

The recurring annual interest rate of credit cards is as high as 18, which is nearly three times the annual interest rate of a mortgage. Comparing the two, it is of course more cost-effective to borrow money in the form of a home loan. Of course, this is only suitable for cardholders who own real estate. Even if there is still a mortgage on the house, you can still borrow part of the funds through some preferential loan measures of the bank, and pay off the credit card first.

For some properties, you can use the bank's comprehensive credit limit to apply for a loan from the bank instead of paying in cash or using a card, and the loan will be settled within the total credit limit of the house. In this way, the interest rate will be Lowering it to the level of mortgage interest rates will, secondly, lengthen the repayment period, making future repayments more relaxed.

It is also one of the available methods to enjoy the advantages brought about by rising house prices, increase the housing loan limit, and free up funds to repay credit cards by inter-bank remortgage. If that doesn't work, you can also calm down and calculate how many assets and liabilities you have. If mortgaged assets such as houses or cars are sold first, don't wait to be auctioned by the court, because the price you sell yourself will be better than the court auction. Then, pay off the debts with the highest interest rates first.

Third move: Take the initiative to negotiate with banks

The reporter has also contacted some guarantee companies and collection companies, and they all expressed the view that as long as the debtor Agree to repay, and everything else is easy to talk about. The implication is that as long as the cardholder expresses a firm attitude towards repayment, even if the one-time payment is changed to annual or even monthly repayment, even if the amount of each payment is significantly reduced, the bank or collection company will still agree. Accepted. Therefore, cardholders may wish to boldly negotiate with the collection staff, sincerely express their attitude of trying their best to repay, and strive for the most beneficial repayment method, which will also help relieve the current pressure.