People in Colombia are getting more and more into debt with credit cards. Which means that not only is the price of things more expensive due to inflation, but it also increases due to the interest rates that must be paid.
(4 out of 10 Colombians feel that they lack money at the end of the month).
The above can become a problem for the personal finances of many. To prevent this from happening, Xavier Serbiá, an expert and CNN presenter, provides six strategies to get out of credit card debt.
(Set three alerts to prevent credit deterioration).
Strategies to pay off debts
1. Stop using credit cards: the expert recommends that if the person cannot control himself, it is best to “cut the cards or hide them”.
two. Take control of finances: The person must make three analyses: one, describe where the money is being spent; two, make a list of all the debts and how much you pay for each of them; and three, identify how much money he has saved and invested.
Later, find where you can cut expenses without putting personal finances at risk.
3. Create a payment strategy: for Serbia, the consumer must organize a list of credit card debts in order of amount from smallest to largest. After that, organize your money to start paying off the debt with the lowest interest rate, and so on. This option is known as the “snowball tactic”.
The other is the “avalanche tactic” which consists of prioritizing paying the debt with the highest interest rate first and then continuing with those with smaller amounts.
Four. Be vigilant with personal consolidation: paying all debts with a loan is not always the best option. First exhaust the other strategies.
(How are the ‘avalanche’ and ‘snowball’ methods to pay off debts).
5. Be wary of firms that offer salvation: There are firms that promise to clean up people’s debts, however the expert advises to be careful with what is signed and what is being promised in exchange for it.
6. Personal bankruptcy?: this should be the last option the person should choose because it brings “far-reaching and lasting consequences.” The best thing, in this case, is to get good advice and evaluate the pros and cons before making this decision.
Finally, Serbiá points out that, although there is no magic formula for learning to manage finances, people “must learn to manage their finances or they will face the same problem in the future.”
BRIEFCASE
