Yahoo Finance Getting Rid of Your Credit Card Debt in Singapore: 5 Essential Tips
You’re probably keeping it a secret. It’s taboo to admit you’re mired in credit card debt, especially when everyone else around you is so intent on keeping up the appearance of prosperity.
But that can also mean you’re forced to suffer in silence as you secretly struggle to pay off high interest debt that just won’t go away, all while appearing to maintain your lifestyle as per normal.
2. Scale back your lifestyle drastically
Now that you know exactly when you can expect to be debt-free, you’ll see that it’s not the end of the world—that is, if you actually do manage to stick to your repayment plan.
You’ll also see that the faster you pay off your debt, the shorter your time of suffering will be. Think of it like bootcamp—painful and intense, but short.
Take the previous scenario we discussed, for instance. To pay off $10,000 of debt in 6 months, you’d have to set aside $2,000 every month. That might seem like a huge amount to Singaporeans earning the median income. But on the bright side, you’ll only have to live like a monk for 6 months. On the other hand, if you choose to pay only $1,000 a month, you’ll need to spend a whole year worrying.
Of course, how drastically you can cut back really depends on your circumstances. If you’ve got an infant at home to look after, don’t go replacing baby food with blended instant noodles to pay off your credit card debt.
As a general rule of thumb, you should cut back as much as you humanly can without putting you and your family in danger. That means no vacations, no shopping except for what’s absolutely necessary, and eating at home as much as you possibly can. And don’t worry, those $18 beers you knock back after work aren’t actually necessary for your survival.
3. Find ways to raise your income
So you’ve worked out how much to repay each month, and are ready to live like a monk for the next few months/years until your debt is repaid.
But what happens if your income just doesn’t permit you to repay a meaningful amount each month? Then you might have to find ways to boost your monthly income until your debt is gone.
Again, yes, we all know Singaporeans work very long hours, and trying to fit in a second or third job isn’t sustainable for most people. But remember, the faster you repay your debt, the faster you can stop. So depending on your stamina and working hours, try your darndest to dedicate some time to income-boosting activities.
For degree holders, one of the easier ways is to go on the hunt for tuition students, especially in the lead up to final exam time when kids need a quick boost for a couple of months. Creative types should definitely try to find freelance assignments for spare cash. Otherwise, look out for part-time or one-off assignments at roadshows and events.
Read also: High-Pay Part-Time Jobs in Singapore – 5 Gigs for a Decent Side Income
You could also try other tactics like selling your belongings on Carousell or eBay, or getting side income by hosting an Airbnb Experience, so you don’t actually need much space if you’re desperate enough), being a pet sitter and so on.
4. Don’t forget that credit counselling is an option
Even if you don’t want to tell a single person in your life about your credit card debt problems, don’t discount the possibility of seeking credit counselling.
The folks at Credit Counselling Singapore, a registered charity, will keep your information strictly confidential so no one will ever find out. Although, when you are finally free from debt, you might want to consider sharing your story with others who could use some help.
They can help you come up with a debt repayment plan, consolidate your debt so you pay lower interest, and teach you how to downsize your lifestyle.
As credit card debts usually incur high interest, they may recommend a personal loan to consolidate the debts so that you can repay the debt at more manageable rates.
5. Surround yourself with people who will help, not hinder you
Unfortunately, peer pressure did not automatically die once you received that O level certificate. In fact, the people around you might be indirectly responsible for your spending habits.
So make sure you surround yourself only with those who are supportive and don’t pressure you to spend more than you should during this very sensitive period.
It could mean distancing yourself temporarily from friends who party only at expensive places, or rejecting a few wedding invites.
But on the bright side, you may get to rediscover cheap or free activities with other friends and family members. And trust me, there will be some friends and family members who will be only too happy to support you in your bid to downsize your lifestyle and vanquish your credit card debt. Finding out who these people are could be a blessing in disguise.
Have you ever successfully paid off a large amount of credit card debt? Tell us in the comments!
Related articles
Debt Consolidation Plans in Singapore – What Are They & How Do They Work?
What Can Debt Collectors in Singapore Legally Do? How To Deal With Them?
The Best Personal Loans in Singapore with Lowest Interest Rates (2019)
Bankruptcy in Singapore – What are the Consequences?
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