Congratulations on getting your first job and receiving a credit card from the bank! Now that you’re adulting with that little plastic rectangle – you feel invisible. We’re talking shoes, bags, clothes, makeup – the whole lot! But what happens when the credit card bills start racking up and you have no idea how you’re going to manoeuvre around it?
One thing to remember is, you’re not alone. While the number of Malaysians declared bankrupt due to credit card usage remains low, according to an NST report, a lot of us are struggling to pay our credit card balance.
The Sun recently reported that in Malaysia, a better credit score could be used as a bargaining chip to negotiate with banks for lower interest rates, be it for a mortgage, a car loan, or even credit cards.
“There are cases where credit card holders have successfully negotiated for a lower annual interest rate of 15% from the average rate of 18% due to their better credit scores,” said RAM Credit Information Sdn Bhd (RAMCI) Chief Executive Officer Dawn Lai in the report.
Start taking actions immediately to maintain a good credit score, and eventually work on getting lower interest rates for your credit card.
These are the 5 smart things you can do now if you’re falling behind on credit card bills:
1. Contact your credit card issuer
You can never rule out a difficult financial situation arising out of a sudden event, such as being hit with unexpected medical bills or being laid off. Whatever you’re dealing with, your best bet is to contact your credit card issuer and let them know about your circumstances, especially when you’re running out of time to come up with the money to make the payment.
If you’ve missed a payment, assure them that it’s only a one-time thing and that you’re now working on paying your debts. Have a clear plan in mind so you can provide some details to your creditor. However, avoid making any promise you’re unable to keep. These are some of the things you can explain to your creditor:
- Why you are unable to pay the minimum or missed a payment
- How much you can afford to pay at the moment
- What kind of assistance are you looking for, and for how long
- When you are able to resume the normal payments
If you’re lucky, your creditor might waive the late fee, extend your due date, or do other things they see fit. In the case where your card issuer is unsympathetic to your situation, you can consider getting a small advance from your employer or borrow some money from a close family member or friend.