It requires discipline, but you can – and while paying your credit card debt you should save cash.

You need to not have some credit card debt whatsoever. But in case you do, don’t make the mistake while trying to dash repayment of failing savings.

Many Singaporeans get stuck in a ‘debt cycle’, which leads to never totally settling accounts. Here to escape it.

Never Skip Saving to Accelerate Debt Repayment

You may feel inclined to pay off it when possible if you have rollover debt on a credit card. That is a notion that is partly right, as the more time you leave the debt the more the interest will snowball. However, you can’t discount savings in order to repay the debt quicker. Doing so could result in a debt cycle.

In the best case scenario, nothing will go wrong. In practice, there are always unforeseen prices. After you’ve get all of the cash into debt repayment, what should you need to get a bad tooth pulled? Suppose that you desire money for urgent pipes or electrical wiring at home?

Odds are you’ll pull out your credit card and begin using credit. This will definitely reverse any debt repayments you might have made, along with the cycle will repeat itself, the following month.

The key is always to save only a little while repaying more compared to the minimal sum. So in the above mentioned example, you can save S$1,000 for emergencies while making month. This will definitely prevent you from being forced to use more credit during crises.

(Don’t use your credit card again, before the whole debt is repaid)

Here’s how to manage the dual aspects of saving and paying off your debt:

1. Make use of a Balance Transfer to Keep Interest Rates Down

Think about a balance transfer in Singapore, like Citi Ready Credit Balance Transfer in case you intend to accelerate your debt repayments while saving.

As credit cards have a compounding interest of 2% per month, a substantial part of your debt repayments goes toward only paying the interest. You are going to significantly speed up your repayments, by removing the interest.

2. For Those who have Multiple Charge Cards, Consolidate Your Debt

Your debt across multiple credit cards splitting. This makes bill cycles more difficult to track, and also you could wind up paying more if among the cards has higher interest rates (most credit cards charge 2% per month, but some charge somewhat more. Some banks will also bill significantly higher interest if you’re repeatedly late on repayments).

Change each of the debt onto a debt consolidation strategy. This will definitely make it easier to divide between your savings and your debt repayment.

3. Don’t Use Your Bank Card Until Your Debt is Fully Paid

If you continue to work with your credit card there is absolutely no point saving or repaying your debt. You ought to only begin charging to it again when your debt is wholly cleared, and not before. Applying this approach, you will be able enough to settle your credit card but still possess an acceptable quantity of savings after clearing your debt.