Simple Ways To Avoid Falling Into a Debt Trap
According to the experts of the finance when an individual fails to pay the dues because of the high-interest rate and this situation is called debt trap. Most of the Indians are now using the credit card for the payment. Based on the survey it has been noted that in January 2018 nearly 36 million credit cards are used by the youngsters and professionals and they got trapped into the debt. If you have not taken any preventive media sure to get out of the trap, your salary will be eaten up by the debt. Here we will see about the simple ways in this post to avoid falling into the debt trap.
1) Reduce the USA, age of the credit card
The main cause for the debt, the trap is the credit card when it is not correctly used. Mainly the young people are entrapped into this debt as they are not aware of the complication by using the credit card. When you came to know that you are spending more than your income, y, you should completely avoid using the credit card. Around 35 – 45% should be your credit card payment from your salary.
2) Verify your credit card statements
You should be very careful when you got trapped into the debt. You have to check the account balances, credit score and have to track your credit card spending. By following this you can get some idea of how to tackle it.
3) The ratio of debt and the income
By this way, you can get access your financial situation ad to realize your move towards the debt trap. When the ratio of debt and the income ratio is increasing you should avoid overspending and pay off the dues. The ratio of the debt to income ratio should not exist beyond 50%.
4) Wise decision
You must give the priority to the one if you have a number of credit cards, EMIs, and the loans. First should completely pay off the debt which is hurting you ten only you can get free from that burden as soon as possible. For this, you have to make the list of pending and in that, you have to analyze the biggest credit which you have to pay off.
5) Careful spending
There is a chance for nit getting alarmed that they have fallen into the debt trap. Therefore it is best to avoid purchasing by using the credit cards. However, it is not possible to get out of the trap but you can avoid unnecessary spending. Many counseling centers are there to help you to get out of the debt trap.