Using a credit card is not without obstacles. When using a credit card without control or facing emergency times, you could be stuck in the problem of bad credit that is difficult. If you are currently looking for ways to overcome bad credit, consider the following three points. Follow the steps one by one, so that you can be faster free of debt and be able to solve the problem of bad credit.
Avoiding bad credit
Allocate Credit for Productive Debt
It is very clear that there are two types of debt that need to be considered, namely productive debt and consumer debt. Productive debt is debt whose value always grows over time. This type of debt helps you to make money and help to invest, and not to waste. Examples of this type of debt such as credit are carried out by a graphic designer when buying a new laptop, which can support it in order to produce more quality images, which bring additional income. That way, even though he owes when buying goods, he can still pay installments and even leave money to save.
As with consumptive debt, this debt value decreases over time, because there is no value that can help you make money. The nature of this debt is more wasteful because it is used only for pleasure and desire. For example, someone who buys new clothes with a credit card, even though there is no need that requires him to buy new clothes. It is only done to please himself.
After knowing the difference, then you already know that you should always allocate debt for productive types of debt. This is done so that you can avoid bad credit, and still make installments.
Use according to ability to pay
After knowing the two types of debt, you must also consider the ability to pay. Even though you already know the debt will be productive, you should take into account the ability to pay that you have. If indeed you are a graphic designer and want to buy a type of laptop that is considered to be able to support your work, try to take other choices with quality that is almost as good, but still can support your work. This will protect you from bad credit due to inability to pay.
Know the Total Debt You Have
Before finding out how to deal with bad credit, of course the first step must be started by knowing the total outstanding bills. If you have multiple debts at once, make sure to calculate carefully. Do not forget, also pay attention to how much interest, as well as other costs that must be considered such as late fees or administrative fees that must also be paid. If you still have savings to start paying off arrears, you can use the minimum payment method for a while, then immediately pay off the remaining arrears so as not to overload the debt too long, because paying too often with a minimum payment does not help you get rid of debt faster.
Stop unnecessary expenses
How to deal with bad credit can also be done by starting to cut all expenses made. Begin to sort out which types of expenses are required to be carried out every month, then choose which expenditures should be stopped. Pay attention to each type of expenditure to the most detailed and often done. For example, you live in a suburb of a big city like Tangerang, then the location of the office is in the Central Jakarta area. If you are used to traveling to work in private vehicles, try starting to switch to public vehicles to cut expenses.
Transportation costs such as fuel, tolls, parking fees, of course, will greatly consume your monthly expenses. For that, try looking for other options such as finding out the Transjakarta or Commuter Line line that you might be able to take, to get to the office. Of course this will make you more troublesome because you have to move around, but if you can cut spending more financially, why not? At times like this, the slightest expenditure that can be pressed can help you as a way to overcome bad credit.
The same is true for household expenses. There are various things that you can start to pay attention to in order to start dealing with bad credit. Various household costs that must be cut, including electricity costs, water costs, and fees for household assistants. Usually the cost of a household has a considerable role, it’s just not too pronounced. Try to start good habits such as pulling out the power plug when it’s not needed, or paying attention to the flow of water so it’s not overused. At the end of the month, you can feel for yourself how much expenses you can cut.
Do not miss, at this time you also have to start stopping the use of credit cards. This is done so that the amount of debt does not accumulate more and burden you in paying off debt. Leave a credit card at home, so you are not provoked to use this card when making transactions. In the meantime, use a debit card or cash in making payments so you can better control your finances.
Search for Solutions
Next, looking for ways to deal with bad credit, there are relief programs that you can use to pay off debts that continue to accumulate. The relief program is a program provided by banks to customers who find it difficult to repay the remaining debts. This program is divided into three types:
One-time discount / discount
This type of relief program allows customers to reduce their total debt to smaller amounts. As the name implies, even though the customer gets a discount in his debt (generally 20-50%), they must pay directly in one payment. In some cases, this one relief program can give cardholders a discount of up to 70%.
Extended Installments with Low Interest
Unlike the discount program in one pay, this one program is suitable for those of you who are financially less. In short, customers who have credit card arrears or KTA arrears can extend their installment tenure to be lighter, the interest earned is lower than the prevailing interest rate in general. If the normal interest currently running is in the range of 2.25%, then it is possible to get interest of only 0-2%.
Another program with this one, this type of program is a combination of the two types of programs above, namely customers get a discount and the remaining payments can be made in installments. The bank will also see the conditions experienced by the customer first. If the customer has supporting conditions that make it more difficult to pay off the debt, then it is likely that they can get this program (provided that the bank in question has the program).
To get a relief program like the three options above, you can ask for help from a company that provides debt management services. Companies that provide debt management programs will help you to provide the best strategy so you can be freed faster from debt. This can be done by looking at the ability to pay and the financial conditions that you are facing. Why so? Because companies like this are usually filled by a team of professionals and more experienced in negotiating with the bank so that you can get a better program for you. One company that can help you get a program like this is Gellert.
Gellert international is the first technology-based professional services company in Indonesia, which provides a debt management program. This program is designed so that consumers who are in debt, have the ability to control their finances again. Gellert Indonesia helps clients through debt management programs, specifically designed to suit different needs for each client. This program is a combination of education on various opportunities to increase income and reduce expenditure, as well as conduct negotiation processes on existing bank debt requirements to reach the amount of payment that is in accordance with the ability. Gellert Indonesia’s headquarters was established in Jakarta in 2015 by a founding team that has collective experience in the financial sector including debt settlement for more than two decades. Gellert made Indonesia as the center of operations as well as a blueprint for the company’s development plan to other ASEAN countries. Since July 2016, Gellert Indonesia has become the first company in Asia to get accreditation from the International Association of Professional Debt Arbitrators (IAPDA).