Paying Off Major Credit Card Debt
It was in 2002 when I got my first credit card from Citibank after filling up a simple form and providing a photograph. I was offered this credit card with Rs. 50000 limit by Citibank as I had my salary account with Citibank (Citibank Suvidha account) since year 2000. I also purchased health insurance worth Rs. 1 lakh via my Citibank credit card. I started using the credit card for shopping and paying some utility bills every month. I kept on paying balance every month. In between this, I kept on receiving calls from people offering credit cards from banks like ABN Amro, ICICI, SBI, and HDFC bank. After seeing the benefits of credit cards, I kept on grabbing other cards offered by the telecallers, so in 2005, I had credit cards from ABN Amro Bank, ICICI bank, SBI bank, and Citibank. Now my total limit on credit cards had reached to approximately Rs. 3 lakhs and I was able to make all the payments for all my cards on proper time. Everything went fine was 1 year until 14th January 2006 when I got engaged with final date for engagement celebration and marriage being April 14 and April 16, 2006 respectively.
Now I had already taken a home loan in September 2005, another loan for buying a car, and started using credit cards extensively for buying furniture for my new house from Kirti Nagar Furniture Market, engagement and wedding dresses from Karol Bagh, Rajouri Garden, South Extension, some pair of shoes and sandals, saris for my to be, jewelry including engagement ring and necklace set from Karol Bagh, and shopping for other items required for marriage from various shopping complexes around Delhi. In India, we have a tradition of giving gifts to close relatives at the time of marriage, so I bought clothes for relatives via credit cards from Chandni Chowk market in Delhi. Everything went well, we got married, went for our honeymoon, and came back. Now it was time for me to check my personal finances because before that I didn’t have even a single minute to think about my expenses, debts, loans, earnings, anything.
In 2007, financial problems for me and my family started. Installments for home loan, car loan, and increased expenditure at home after marriage led me into the debt trap of credit cards. I had enjoyed the benefits of credit cards, now it was time for me to enjoy the demerits of credit cards. I admit I was not able to clear my credit card dues every month for several months. The credit card debt kept on increasing. It became so high that I took a personal loan in 2008 to clear two of my credit cards, Citibank and ABN Amro. I did this because I had seen that late fees and interest charges of credit cards are far higher than any other loan, so closing credit card accounts which come under bad debt should be my initial step for becoming debt free. It was in 2009 when after losing all my savings and investments, I closed down all my credit cards and got rid of the biggest financial problem I had in my life. The total amount I utilized from credit cards was Rs. 275000/- and I paid them back more than Rs. 400000/- to come out of debt. Right now, I don’t own any credit cards and only use four International Debit Cards for any types of transactions whether online or offline. I am happy that I am at least credit card debt free.
So it is my personal recommendation to credit card users around the world that getting and using the credit card is very easy but it is very difficult to come out of major credit card debt due to credit card late fees and interest charges, so you must use the credit cards wisely. If you spend extensively on shopping or anything, it will be better if you perform all your transactions in cash or with the use of debit cards. With debit cards and using your own money, you will keep your own spending, your family budget, and your overall personal finances in better control. Also, credit cards are just like plastic money and it is better to pay off major credit card debt as soon as possible.