As part of the Debt Panel, The National published an article on a resident struggling with debt and Ambareen Musa’s response on how they can handle the issue.
I had Dh120,000 debt and have just paid off two three-year loans. Now I am now focusing on the remaining amount of Dh60,000, which is on credit cards. However, due to a struggle over the last three years, with late payments, returned cheques (all paid in the end) I apparently have a bad credit score. The banks I had loans with refuse to top up and my applications with every other bank have been rejected. Even the bank I’ve banked with for over four-and-a-half years, and deposit my salary to, has rejected my application for a debt consolidation loan twice. The first rejection, I was told was due to my debit account hitting under a Dh10 balance and I was advised to keep a Dh100 balance for a few months to restore my profile.
Here is what one of the debt panellist – Ambareen Musa had to say:
Start with evaluating your monthly expenses and find out where exactly you’re spending your Dh15,000 salary. Identify expenses which can be eliminated immediately. Ideally you want to stop using your credit cards altogether to prevent further debt accumulation. Try reducing costs by moving into a smaller place or making lifestyle changes. Also, when paying off your credit cards, start with the one which has the highest interest rate. This way you get rid of the most expensive credit card sooner. Once it’s settled, you can use the amount you were paying towards the most expensive credit card, to settle the next one on your list.
For full article go to The National