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:
2. Forgo unnecessary expenses
Start reviewing your monthly expenses and try to track literally every sen that leaves your wallet or bank account, and look for ways to cut down costs. Find out if there’s anything that can be eliminated or reduced. For example, can you find a cheaper broadband plan? Can you get lower rates on your insurance? Will you be able to carpool, bring your own meal to work, or cancel your cable TV subscription?
Be willing to forgo unnecessary things for a while until you’re able to make your credit card payments. Whatever it is, never put off your utility bill payments to avoid disconnected services, which will make your life even more difficult.