Keeping up with overdue payments on a single card is tough enough. Now, imagine having to pay several creditors at once. On top of racking up high interest, multiple credit card debts also mean multiple due dates and payments to keep track of.

Is there a way out?

Your best option is credit card debt consolidation. This is a strategy where you combine all existing credit card debt into one monthly payment. It is ideal if the debt plan has a lower annual interest rate than your existing debt. It makes repayments more manageable.

Understanding Credit Card Debt A Bit Further

Today, it has become a reflex to reach out for your credit cards to cover expenses. Whether you’re buying groceries or paying for online purchases, using credit cards is the norm. And why not?

Credit cards allow you to borrow up to the credit limit set on your card. Plus, it’s useful in getting a good credit score or when you want to make larger purchases with deferred payments. However, you should always remember that a credit card is a form of debt.

What Is Credit Card Debt?

Credit card debt is an unsecured liability. This means it doesn’t require any form of collateral, such as your home or car. You can borrow month after month as long as you repay what is due. It isn’t like traditional loans where the accounts are closed once the balance is paid off.

With a credit card, you can use it indefinitely.

However, you can accumulate credit card debt if you fail to make repayments. It becomes worse when you have multiple credit card accounts with varying interest rates and credit limits. This can seriously damage your credit score and history.

How It Works

The outstanding balance of your credit card represents the amount you need to repay. Interest is then charged on the balance daily if you choose not to pay in full. And unlike traditional loans, most credit card interest rates are variable.

Ideally, you need to pay the outstanding balances in full. However, most credit card issuers require that you at least pay the minimum amount due every month. It’s usually around 1% to 2% of your outstanding balance, plus interest charges and fees.

The outstanding balance on your current bill will be rolled over to next month’s bill plus interest.

Your debt will continue to accumulate as long as you don’t pay in full.

How Much Debt Is Too Much?

To avoid falling into debt, you must know how much debt you’re YellowBananana97accumulating on your card. This means understanding your credit utilization ratio.

It is the ratio of your outstanding balance to your credit limit. It’s the percentage of your credit limit that you’re actually using and it has a huge impact on your credit score.

You can calculate the credit utilization ratio of each credit card. Simply divide the outstanding balance by the card limit. Here’s an example:

Balance Limit Card Utilization Ratio
Credit Card 1 0 $20,000 0%
Credit Card 2 $12,000 $50,000 24%
Credit Card 3 $42,000 $110,000 38%

So what is a good utilization ratio?

The rule of thumb is to stay below 30% – higher than that can put a dent on your credit score. That said, the lower your credit utilization ratio, the better.

Aside from your credit utilization ratio, there are other signs that you might be accumulating too much credit card debt:

  • You spend more than what you earn
  • You can’t keep up with credit card payments
  • You’ve used one credit card to pay another one.
  • You’re paying off credit card debt instead of adding money to your savings account.

If any of these signs apply to you, it’s time to take the necessary steps to curb your spending. The first step is to pay off your credit card debt before it snowballs further.

5 Effective Ways to Pay Off Credit Card Debt In Singapore

  1. Zero Interest or Balance Transfer Credit Cards

You can transfer all your outstanding balances to a low or zero interest rate loan.

Think of balance transfer as similar to short-term loans with 0% interest. This is commonly offered on credit cards or credit line accounts. So why consider this option?

For one, you can avoid paying high interest rates ranging from 19% to 28% p.a. that would be otherwise charged to your credit card debts. If you have multiple credit cards, this means hacking up more debt.

Balance transfer allows you to consolidate your debt in one account.

There are 0% interest credit cards that charge no interest within a promotional period – usually for six to 12 months.

So you can transfer all your outstanding debt over to it. Make sure to pay your balances before or by the end of the promotional period. Any outstanding balance after the period will be charged a regular credit card interest of around 25.9%.


  • 0% interest rate for a promotional period
  • Short term loan
  • Flexible payments


  • You may pay a processing fee
  • Shorter repayment period, usually between 6 and 12 months
  • High interest rates after promotional period

Happy young asian couple and a licensed moneylender

  1. Personal Loan

You can apply for an unsecured personal loan to pay off your credit card debt or other debt obligations. You can borrow as low as $500. Some banks or financial institutions offer loan amounts 4 times your monthly salary. Additionally, it usually has lower interest rates – around 3.5% to 10.8% p.a.

A personal loan is disbursed as a lump sum into your bank account. This means you can pay off all your credit card debts at once. Then you’ll have to pay a fixed monthly repayment with interest throughout the loan tenure.


  • Relatively lower interest rate than a credit card interest rate.
  • Longer loan tenure is available if needed. Some banks offer personal loan tenures as long as 7 years.
  • Fixed monthly payment
  • Fixed payment period


  • You may need to pay a processing fee
  • Early repayment fee
  • Only customers with a good credit score and higher income can enjoy the lowest rates
  1. Home Equity Loan or Line of Credit

Are you a homeowner?

If so, you can take out a home equity loan. Think of it like cashing out your home equity and using the lump sum to pay off your credit card debt and other debt obligations.

A home equity loan has a fixed interest rate and since it is secured by your property, you’ll likely get a lower rate than on a personal loan. The catch? You can lose your home if you fail to make payments.


  • Lower interest rates than personal loans or balance transfer
  • May not require a good credit score to be eligible
  • Long repayment period


  • You need equity in your home
  • A home appraisal is usually required
  • Your home becomes collateral

Don’t want to risk losing your home?

Another option is to apply for a personal line of credit. This is an account where you can get money when the need arises. This means borrowing from the available credit limit of your account. The interest rate is charged only on the amount withdrawn.

You can enjoy a credit line limit of up to 4 times your monthly salary. If your yearly salary amounts to $120,000, then you can enjoy a credit limit of up to 8x your salary.

A personal line of credit offers a lower interest rate than credit cards. Plus, it has a flexible repayment period, allowing you to pay off your credit card debt.

  1. Consider Temporarily Reducing CPF Contributions

Temporarily reducing your CPF contributions can free up much-needed cash. This is not an ideal solution, but you can redirect the extra cash toward paying off your debt.

Consider paying the minimum contributions for a few months. But keep in mind that if you’re only paying the minimum for a few months to a year, it might cost you more in the long run.

That said, it’s best to weigh your options and calculate where you’ll get more savings.

Once you’ve kept up with your debt payments, you can redirect the money you were putting towards paying off your credit card debt back to your CPF contribution.

In fact, financial advisors advise increasing contributions. Doing so will help make up for the lost contributions.

  1. Debt Consolidation Plan

A Debt Consolidation Plan (DCP) is a type of personal loan and is a government-approved scheme. It is available in all leading banks in Singapore.

You can compare the debt consolidation plans offered by the following banks:

  • HSBC
  • Standard Chartered Bank
  • Citibank
  • UOB
  • DBS
  • OCBC

With DCP, you can combine all existing debts, personal loans, and other debt from unsecured credit facilities into a single loan with a lower interest rate. You’ll be repaying a monthly payment for a period of up to 10 years.

This plan is designed for Singaporeans and Permanent Residents who are struggling with debt, not more than 12 times their monthly income.


  • Fixed interest rate which is lower than credit card interest rates
  • Fixed monthly repayment and payment period
  • Long repayment period of up to 10 years


  • You cannot apply for a new credit card or loan until your outstanding debt is less than 8 times your monthly salary

Another option is to apply for a personal loan from licensed moneylenders. They have less rigorous eligibility criteria. That said, they can provide fast cash disbursement perfect for when you need emergency cash.

With a licensed moneylender, you can borrow up to 6 times your monthly income. The maximum interest rate they can charge is 4% per month.


Using credit cards for your purchases isn’t inherently wrong. In fact, it’s a useful financial tool you should definitely utilize. When used wisely, it can improve your credit score.

Here are a few quick tips:

  • Learn about your current credit card accounts. Review the terms including the interest rates and charges.
  • Before applying for a new credit card, compare the terms, conditions, and benefits offered by different card issuers.
  • Keep tabs on your spending. Check your credit card bill every week.

Implement proper spending rules and stick to them. Control your credit card debt and pay off outstanding balances.

And if you have multiple debts, you can apply for a personal loan, especially with Fortune Credit. Licensed moneylenders will help you find the best financing options that will suit your needs. Plus, you’ll get fast cash disbursement when you need emergency money.