The number one financial problem is bad debt. You see, bank lend you money to buy the stuff that you can’t afford yet. For example, you borrow money to buy car, house, or to use the money as capital in your businesses. The problem rises when you misuse the financing facilities to buy the wrong stuff.

In this article, I am going to discuss the three most important things that may change your view about using credit card as a financing tool. Discover the three most important understanding that will help you cope with your credit card debt (if you have any)

credit cards debt settlement
Pay off you credit cards debt immediately

Bad debt makes you poor

Rich people use debt to finance their assets purchase. That kind of debt is called good debt by Robert T. Kiyosaki. Poor people borrow money to finance their vacations, gadgets and all sorts of expense-generating possessions.

Majority of people finance their instant gratification on credit card. That significantly increases their spending which is on credit. Do it often enough, you will have trouble paying back the money you spent on credit card.

So the first concept you must understand is that it is fine, or even great to buy stuff with borrowed money, only if those are assets.

Delay gratification: make it into a habit

When you are deeply in debt, the most significant habit that you should cultivate is delay gratification. You see, when you don’t have a specific good habit, which means you are having the opposite bad habit. When you have the habit of wanting instant gratification, it means you don’t have the discipline to delay gratification.

The first step is to just cultivate a new habit. That is to delay all your wants, and luxuries. Don’t ever think of it if you are still in debt. You can’t allow yourself to keep spending money like there is no tomorrow.

Cut expenses drastically and get extra income

After getting into the new habit of delay gratification, it means that you no longer incur additional debt. Now you will need to find extra money to settle your credit card debt.

There are only two ways to have more money now. The first one is to cut your current expenses drastically. If you are living on RM2000 fixed expenses a month, cut it instantly down to whichever number you can live with. Start by 10% cut, then another 10% …and try slashing some items again when you are already in comfort zone.

By the time you had settle the outstanding credit card amount, you’ve already build yourself a new habit of living below your means.

At the same time, one further step to take is to find ways to increase your income. Effort is always needed to make more money. But it is worth the time you spend on it.

With all these extra money you find, you shall be able to make extra payment to the debt and got yourself out of the mess really soon.

In my MA$ course, I show how to have a debt paying system in place. You may be interested to find out more about it if you are having trouble with credit card debt now.


Personal finance author and trainer

    16 replies to "How to pay off your credit cards debt"

    • […] charging interest right after the purchase. Look out for credit cards offering at least 21 days before interests on new purchases are counted. A longer grace period allows you to save more […]

    • Mark

      Hi Saravanan,
      Which bank offer credit card tax refund?


      • KCLau

        I use Maybank and they automatically refund the tax.

    • Thana Ramayah

      This Plastic Money,contrary to its name has always been my road to resilience.Have Card Will Travel!

    • munib

      thanks KC Lau & team, i just won an Icon book..i will always participate in every contest in this blog

    • haja

      I have two credit cards with a total limit of RM4000.I usually use up fully either to buy things or services.When the banks send me the statement,I pay a little above the minimum.What’s the best way to overcome this situation.And what is meant by balance transfer offered by banks?

      • KCLau

        Please post your answer using Facebook comment in order to participate in the contest.. The comment box is just above this one.

    • Gangka


      Can anyone explain to me what is the 55 days interest free period? I couldn’t understand the interest free and how to get the cash back.. Need your advice.

      Thanks in advance.

    • Awang Saifeluddin

      I cut most of my cards and left with 1 international bank and 1 local bank cards. Then negotiate the balance to pay within few month with discount.

    • Sayuti

      You may use your credit card to gat cash, and use the cash to generate extra income. Continue work to generate extra income until one stage you will get pasif income…. How can you do it?
      We have the skill and would to share with all the skills.

    • Andre

      I make it a point to mark not only the credit card Due date but also the Statement date on my table calendar. This is to ensure I always pay on time and enjoy the 20 days interest free period.

    • saravanan

      I used to have 4 credit cards. totalling debt of 12 K . I do pay the minimum payment of 600 everymonth. Recently a bank offer 7K balance tranfer with 6 month “zero” intereset scheme. I transfer the total 12K overthere , 7K + 5k and pay the same 600 everymonth. It do help me on reducing the balance faster then the previous banks.
      And yet I save another 200 every year on the card tax. ( The current bank refund the 50 also )

      • bala

        can you tell me which bank offers this

    • THAM KH

      I make sure to settle full payment each month before due date.

    • Alice Saw

      I set reminder and repeated it every month for my each credit card 5 days before the payment due date in order to pratice punctuality on the credit card payment settlement.

      • KCLau

        That’s a great habit

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