by Amir Hafizi

So you check your credit card bills either online or you’re reading the statement they send you every month. Your knees start to shake - and not with pleasure. Your mouth becomes dry and makes an ‘O’ as you put your hands on your cheeks. 

Everything in this world seems to melt away in a spiral of colours. You are either stuck in an Edvard Munch painting, an over-the-top drama queen, or you are in credit card debt!
Don’t commit suicide just yet! There are several ways to get out of this thing, but first, please check whether you really are in credit card debt. Here’s a simple definition: if you can’t pay all your outstanding balance when it’s due, you are in credit card debt.

If you are in credit card debt, there are a few ways you can manage it.

These are some pointers for you to consider:
1. Balance transfer
Most credit cards charge anywhere between 13.5 to 18 percent interest on your balance. That means if you owe credit cards RM10,000, every year they will charge between RM1,350 to RM1,800, added to the RM10,000. Balance transfer promotions in most banks charge between 0-1 per cent for the first year, giving you time to clear your debts without having it grow like a financial tumour.

The best way to stop this increase through interest is to do a balance transfer. Balance transfers are when you get another credit card and transfer your balance from another card to that one. Say, the RM10,000 card debt is with NamiBank A, charging you 18 percent interest, you get a card with NamuBank B and do a balance transfer and take their promotion of 0 percent interest for the first 12 months.

Then, you need to pay! Make sure you have a payment plan and specify how long you need to clear off everything, using the balance transfer. Say you pay RM500 a month for 21 months, to clear your original debt plus whatever interest charges apply in the second year. You can still use your new balance transfer credit card, if you can afford it, but it is not advisable.

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2. Short-Term Personal Loan
Personal loans usually charge exorbitant interests, and is like a hire-purchase agreement where interest is charged on the original amount you borrowed instead of the remaining balance. However, there is a way some consider acceptable, in managing your debts using personal loans.

Short-term personal loans usually charge between 3-6 percent interest, which is better than credit cards which charge 18 per cent. Simply apply for a short-term personal loan that covers all your debts and then pair it off using a standing instruction to your bank.

However, this is not the best way as balance transfer can theoretically afford you less interest. Hey, between 3 percent and 0 percent - which one would you choose?

3. Negotiate
If your debts are really insurmountable using either balance transfer or short-term personal loans, you have one other option - begging.

Banks want their money back and some might want to help you pay off your debts. What you do is, set up an appointment with the bank and tell him your story - your financial story. He/she will ask for documents, payslips, sign some stuff, etcetera and at this point, you will give them anything anyway.

You can negotiate banks to reduce the interest they are charging on your credit cards or even crystallise your debts. This means they can just hold you to your debt and won’t charge you interest, but will ask you to pay the full amount and sign some stuff.

There is no guarantee the banks will do this, but if you are at the end of your rope then this might be an option you can consider.

Bottomline, no one can help you get out of credit card debt, unless you have rich relatives and even they might ask for something insane like your first-born child as payment.

No financial consultant will help you - unless they are friends - because if you can’t clear an RM8,000 credit card debt, you probably suck financially and is not worth the time for these people.

However, free help is available, surprisingly. Agensi Kaunseling dan Pengurusan Kredit (AKPK) was set up by Bank Negara to help people manage their finances and you can possibly get them to give you some advice, and maybe a sympathetic ear. They could even help to negotiate with you. Reach them at
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Please note that so far, you can’t use your EPF to pay your credit card debts. (How much have you accumulated anyway?) There is no magic wand that can take the problem away. If you can deal with it, and use it properly, a credit card can be a powerful tool. If you can’t control yourself, simply stop using them.