The joy of spending in the festive season often leads to an increase in credit demand. With card issuers extending lucrative offers, discounts, and deals, many credit card users end up piling up their credit card debt.

Here are four ways to manage your credit card debt in case you have overspent during this festive season:

Convert entire outstanding balance into EMIs

Converting the entire dues into EMIs can help card users to repay in smaller tranches. The finance charges on unpaid dues can range between 30-49 per cent per annum depending on the card, whereas the late payment fee for each billing cycle can go up to Rs 1,200 depending on the unpaid dues. In the case of EMI conversions, the interest rates can range anywhere between 12-21 per cent per annum whereas the tenure can range between 3 months to 60 months.

Convert big-ticket purchases into EMIs

This option will suit those who wish to convert their big-ticket expenses into EMIs. Doing so will save them from incurring additional interest costs on converting their entire bill into EMI. Credit card issuers usually set a minimum threshold amount ( Rs 2,500 or even lower, depending on the credit profile ) to convert particular spending into EMIs. On the flip side, the reward points earned previously on transactions would be reversed post-conversion.

Transfer your outstanding to another credit card at a lower cost

Balance transfer facility allows users to transfer their existing credit card dues to another card. The transferee card issuer generally extends the promotional interest period for a few months during which its finance charges are lower. This allows cardholders to work around their finances and arrange funds for the repayment of the transferred balance. Once the promotional interest period gets over, the unpaid transferred balance will begin attracting the usual interest rate applicable on the transferee card.

Some credit card issuers also offer the facility of converting the transferred credit card balance into EMIs. This option is helpful for consumers whose existing card issuer(s) refuse EMI conversion or are charging higher interest rates for it. Credit card users lacking the capacity to repay the entire transferred balance within the promotional period can also consider opting for the balance transfer on EMIs. This will allow them to comfortably repay the transferred balance in smaller tranches over an extended period as per their repayment capacity.

Alternative financing options

Those facing difficulties in repaying their outstanding credit card dues can also consider the cost of availing alternative financing options- personal or top-up home loans (in the case of existing home loan borrowers). The interest rate of personal loans would be significantly lower than the finance charges levied on unpaid credit card dues.

For existing home loan borrowers, availing of top-up home loans would most likely be the least costly option. The interest rate of top-up home loans would usually be the interest rate charged on the existing home loan or a notch higher. Their loan tenure too can go up to 15 years depending on the residual loan tenure.

The author is – Director, Paisabazaar.com