Debt Trap
Well…I’ve read them and this is what I think.
Its easy to fall into this consumerism trap. Its easy to get excited with all the hoo-ha of starting a new life. In this new digital age of ours…where everything is instant (from emails to iced tea), we want everything there and then. Instant gratification.
Everywhere you look nowadays, you see someone holding a brochure and inviting you to listen to them and sign up for the newest offer that credit card companies could come up with. I’m always amazed when I see people actually stopping to listen to them. Me? I just wave them off.
Been there. Done that. I put up my hand when they talk about people who are saddled in debts. Yeah…I’m one of them.
Renovation loan. Furnishing loan. Credit cards. Loans for this. Loans for that. You name it. I’ve got it and I’m owing money for it. The only thing I don’t have is a car loan. How come? Cos I really got no money for one.
Now…it really is easy to bring up this matter to the public. Its easy to come up with lists of examples of how the Malay community is ’showing off’ money thats not theirs. But not everyone is doing this to show off. Some of us just want to have the best for our new family. I don’t go around inviting people to my house to let them see my crib.
Instead of being blog critics…let’s all try to find solutions to these problems.
So how?
Step #1: Stop!
First step is to tell yourself to stop it. No more loans. No more using of the credit cards. The moment you close the gaps in your expenses, you’re getting better already. Yes its not easy. You get bombarded with ads on TV asking you to buy, buy, buy! Newspaper ads from Courts, Dell, AudioHouse and every other company implore you to buy their newest thingamajig. And if you can’t afford to pay in cash, no problem! Courts offer you up to 60 months of repayment plans. That’s 60 months for them to get interest from you. Whoopee!
Ask yourself. Do you really need it? Or do you just want it? Most of the time its just lust. Yeah we all lust for other things besides humans, you know. Take your time. Never buy something impulsively. If a salesman tells you its the last day for the sale…tell him nevermind. He’s more interested in his commission than in you saving money during the sale. Go home…and be happy cos you didn’t waste money on something you don’t really need.
Step #2: Family Ties
If you happen to be deep in debt over your credit cards…this is the hardest one. The reason is they have the credit card companies have soooo many different ways to charge you. They have the yearly interest. Then they have the late payment penalty. If you take cash advances from your card…they’ll also charge you. And that’s just the tip of the iceberg.
So…if you don’t have credit cards, good for you! Avoid the credit card people like the plague. You don’t want to be in their trouble unless you are very, very sure that you can pay off all your credit card expenses within the same month. NEVER ROLL OVER YOUR CREDIT DEBTS.
If you already have them…and are drowning in rollover debts, here’s what you can do. Admit your silly mistake. Be humble. Go to your family and ask them for help. Of course…there’ll be some oohs and aahs and some scoldings to endure. But after all that…your parents would want to help. They still have a stake in your life. They want to see you have a happy family and they want to see their grandchildren live happy lives too. Being older and wiser…they’ll be able to help you find ways to solve your problems.
My parents and parents-in-law helped me here. They were disappointed in me. Sure. But they also wanted to help me solve my problems. They helped me close my credit cards. Now I’m paying them off. Instalment free. See? No need credit card also can get instalment free loans. Thanks Mum, Dad, Bapak and Mak. You helped me retain my sanity.
However…what if your parents can’t get you out of the quagmire you’re in?
If your parents or your other family members can’t help you…then go to a loanshark.
Just kidding 
Step #3: Get A Personal Loan
This is the exception to Step #1. If you tried step #2 and you are unsuccessful, try to get the next best thing. A loan like that of James or EzyCash. Although they still have interest, its less than the 24% that credit card companies charge. There are no hidden charges. And the amount you owe the banks will start going down steadily and surely. Use the money from the loan to pay off the credit cards. Kill off the credit cards first, then tackle the others. However DO NOT use this money to buy other things ok! Its strictly for paying off the credit card loans. Nothing else.
Step #4: Get A Repayment Plan
Once you are behind in your payments, the banks will call you everyday until you make payment. They don’t care if you’re working, or if you are busy. They just want to know when you are going to pay them. When this happens, its easy to get overwhelmed. You just want to switch off the phone. But do not ignore them. Tell them the truth. If you can pay them, tell them when. If you can’t tell them that you would like to pay them back but you are not able to do so. Ask them if its possible to have a repayment plan. In this way, you’ll pay a specific amount until you have finished paying for the card and then close it. There will be an interest but usually they will lower it from the 24% per annum. In this way…the debt amount will surely and steadily decrease. As long as you make the payments, they won’t bother you anymore.
Step #5: Counselling
If steps #1 - 4 does not work for you, consider getting counselling. Go to the Credit Card Counselling website to find out more. They have regular talks which brief you on the actions you can take to solve your debt problems…even bankruptcy. I went to one of the briefings and I got the idea for Step #2 from them.
And that’s it! Its not easy at first ok. Its not easy to tell your parents. Its not easy to admit that you have problems. But the problems have to be solved somehow. Swallow your pride. Admit your mistakes and learn from them.
If you are able to somehow avoid in borrowing…then good for you. Just don’t tut-tut other people. Don’t have to predict doom and gloom for the others. Let me know how you buy your HDB flat huh? I’ll be interested to know how you manage to avoid paying interest for that. Oh and banks pay YOU interest for saving money with them. Is that ok too?
Its no good telling people what’s Haram and what’s not. We all will answer to God one day.