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Christmas is the time of giving – how to get the high credit card interest under control

credit loan

“Oh you happy, oh you blessed, merciful Christmas time” says the song – but often after the festival there is great disillusionment. That is when the credit card bill flutters into the house. What to do if the joy of giving suddenly becomes an unpleasant financial burden and the card interest threatens to gain the upper hand?

For many, having their own credit card has a touch of an upscale lifestyle. After all, you can pay with “your good name”, at least that’s what the common advertisements make you believe. Unfortunately, the “convenient” payment quickly turns into a less comfortable fault. Many simply do not know what they are getting into and how high the credit card interest rates really are.

Especially during Christmas, the seduction is great: you quickly forget whether the “ease” of paying, how much you actually spend on the wonderful gifts.

 

The pitfalls of high card limits and interest on debt

credit card

With many providers, the card limits granted are quickly three times the monthly income. In addition, there are interest rates of up to 12% pa on the open amounts. In combination, very large amounts of debt can come together with considerable interest charges. If the amount owed cannot be paid in full at the end of the month, the trap snaps in the form of interest. The amount owed rises continuously and it often takes a long time to pay off the total debt in installments.

 

Bad awakening – when interest spoils the fun

Bad awakening - when interest spoils the fun

Credit card holders often pay too little attention to billing at the end of the month. Unfortunately, this also applies to the terms and conditions of card issuers. There are in fact buffeted regulations: For example, the interest is often offset against the total amount and not against the remaining amount owed and does not begin, as assumed at the time of settlement, but already on the transaction date.

In short: In the end, the use of the credit card only serves the additional return of the card issuer and makes the already high interest rates more expensive due to the hidden additional costs. When viewed soberly, the maximum permitted credit card interest of 12% is exhausted by the sometimes confusing detailed calculations in the terms and conditions of the publishers.

 

Fair conditions and low interest rates 

low interest rates

Is there a way out of such situations or are you forced to pay excess credit card interest for a long time and reward them with extra fees? Yes, there is a way out: debt rescheduling through a simple refinancing loan with fixed terms and fixed monthly costs as well as a massively lower interest rate.

By refinancing via a personal loan, you can settle the outstanding debt at the card institute in one fell swoop. This way you avoid the high debt interest and can actually work on paying off your debts. With specialists like Agree Bank you get significantly lower loan interest and can use professional and transparent advice to develop a loan offer that meets your needs. This means that your monthly interest charges can be almost halved within a very short time, at fixed amounts, calculable terms and finally without any other incalculable surprises. Always with the aim that you are debt-free as quickly and easily as possible!

Loans from family members or friends

family loans

Loans from family members or friends are popular. They often offer better conditions due to the personal relationship. But that is precisely the challenge. So that a loan from family or friends does not end in a dispute, it is advisable to observe a few, but important points.

In the event of a liquidity bottleneck or an upcoming investment, the family or friends are often asked for financial aid first. Such loans are very widespread, be it to finance basic and further training, the renovation or furnishing of a property or the purchase of a new car . The conditions of such personal loans are often better – after all, you know each other and are well-disposed. The loan from a well-known person often leaves you feeling better.

 

Despite the lack of regulations – written agreements are worthwhile

Despite the lack of regulations - written agreements are worthwhile

In addition, there are no special formal requirements for such loans . The general norms of the Swiss Code of Obligations (OR) apply. This simplifies the process of taking out a loan from family members or friends. And yet it is advisable to note a few points. So that the loan does not eventually burden the relationship with the family or friends.

Because even such a loan always involves certain risks. Both your own professional and private situation, as well as that of the lender, may change. What happens if the debtor can no longer pay the installments or can only pay them late? What to do if the creditor wants or has to get her money back early? Such and a few other questions can be settled by contract before taking out or paying out a loan. A written contract creates clarity and thus security – for all parties.

 

Tax benefits through a written contract

Tax benefits through a written contract

A written loan agreement also enables the debtors to deduct the loan interest from their income in the tax bill. To do this, however, the loan interest must be documented in writing, i.e. contractually. An oral agreement is not sufficient here.

In addition to the interest on the loan, a written loan contract can also specify the amount of the loan, the purpose, the repayment modalities, the duration of the contract and other collateral. There is a possible contract template here . So that the loan is a positive experience for everyone involved and does not lead to the next argument.