Why is it cost-efficient to repay your credit cards ?
We are exposed to credit card expenses very often, without even noticing. It is very important to emphasize that the interest rates for credit cards are twice as high as the ones for loans, and it is only when we learn this that we become aware of the loss.
What should we do when we have credit card debt?
The easiest way out is, of course, to pay the debt – but reducing debts still requires some discipline. Credit card debts appear without noticing very often. In such situations, taking out a loan may help. Credit interest for one private or online loan are half as much as the ones for credit cards. An even larger problem occurs if you have multiple active credit cards and if indebtedness comes from different accounts. This may cause you to lose track of the amounts that you need to pay back on a monthly basis and how much each of these amounts encumber your budget. In such situations, you must act fast and find a useful solution.
Comparison and repayment: save money by submitting a loan application
In Switzerland, it is advised to repay credit cards through a private or online loan in such cases. This procedure provides the debtor with several advantages. First of all, when taking out a loan, the credit interests are half as much, as noted above. The average interest rate for credit cards in Switzerland is 12% and the highest interest rate for a loan is 10.95%. This difference alone indicates how much the pay-off of credit cards through one credit is more cost-effective. In order to save as much as possible here, we also advise you to compare several offers before taking out a loan. As a highly-experienced broker, Miro Kredit AG is offering you an online loan calculator for calculating the monthly instalment, by entering the desired loan amount, the repayment period and the effective annual interest rate. In order to apply for a loan, there are only a few more steps.
A better overview, lower costs: loan consolidation
If you are taking out a loan in Switzerland, it may be possible to close several credit card accounts, provided, of course, that a large enough loan is taken out. By taking out a larger loan, you will cover all the outstanding indebtedness and redeem all credit cards. In this way, you will first obtain a more favourable interest rate, and you will also have a better overview of the amount of money you are spending per instalment on a monthly basis, in this case on one instalment. In this way, you will not have any arrears – or at least to a lesser extent because it will be easier to keep track of what you are spending on a monthly basis.
It is very important to note that in this way, you can also plan better because you will have to repay one instalment per month, which will always be the same and cannot change for the entire repayment period. The repayment of all indebtedness by taking out a loan will also make budget planning easier for you during the entire loan period because you will have an insight into how much more money you have available. Submitting your application through Miro Kredit AG is easy and fast, and you are closer to realizing a loan within a few minutes through our web page.
Credit card vs private loan
If you are wondering whether it is better to pay for something with a credit card or by taking out a private loan, the amount or price of the bill that you are supposed to pay matters the most. Credit cards are suitable for smaller expenditures. A greater risk of indebtedness arises from the ease of payment because money is spent more quickly and more than is available. Many customers only notice debts after a certain period. However, for larger expenditures, you should think very carefully and instead of choosing an easier option, choose a loan. In many cases, this is also the only option available because the credit card limit is often CHF 3,000 per month. In the beginning, however, repayment seems to be a favourable option because CHF 50 is the most needs to be paid back, as a rule. However, this does not change the high interest rates, which cause a constant increase of the whole credit card debt. Since there is no precisely defined repayment period, as well as a low monthly instalment, it often results in the debtor losing control, which increases the risk of over-indebtedness.
If you have already accumulated credit card debt, its amount is the decisive factor for repaying the debts by taking out a loan. If only a few hundred Swiss francs is in question, repayment using a loan is not cost-effective it in that case. On the other hand, for amounts that are higher than CHF 5,000 and that are open for more than 3 months, repayment using a loan is cost-effective. If you have large expenses that could exceed this amount, we advise you to cancel your credit cards and take out a private loan or online loan. Miro Kredit AG offers a personal loan calculator that is easy to use. In this way, customers can ensure lower interest rates from the beginning and reduce the risk of being over-indebted.