According to the latest report from Roshi Pte Ltd, the Philippines’ credit card debt has reached what they call a critical risk level. More and more Filipinos are missing credit card payments, and the total amount of unpaid debt is rising fast.
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| "man-couple-people-woman" by Mikhail Nilov is licensed under CC BY-NC-SA 2.0 |
With inflation still high and wages not keeping up, it’s no surprise that many of us are turning to credit cards just to get through the month. Be it buying groceries, paying bills, or covering emergencies, credit cards have become the go-to option.
However, the main issue is the credit card interest in the Philippines can go up to 24% per year. If you’re only paying the minimum each month, your debt grows faster than you can pay it.
What Can You Do If You're in a Similar Situation?
1. Temporarily Stop Using Your Credit Card
This is very straightforward. If you want to stop racking up debt, then stop using it.
2. List Down All Your Credit Card Debts
You can use a Spreadsheet software or plain old paper. Once you've listed all your debts, you can then plan which debt you will pay first.
3. Paying Your Debts Using Snowball or Avalanche Method
If you use the Snowball method, your strategy is to pay the "smallest debt amount" first.
If you use the Avalanche method, your strategy is to pay the "highest interest debt" first.
4. Debt Restructuring Plan
Banks usually have restructuring plans to help with debt payments. Don't be afraid to ask.
5. Save Any Amount You Can
Build your mini-emergency fund. Even a Php1,000 or Php2,000 can go a long way during small crisis. Start building your habit of saving, your future self will thank you.
6. Look for an Extra Source of Income
This is easier said than done, but let us face the reality that a single source of income is not enough to cover all your debts. If it was enough, you won't have any debts in the first place.
Do part-time work, online gigs, or selling to help speed up your payments.
Closing Thoughts
Credit cards are not evil. They’re just tools. But like any tool, they can either help you build or break your financial future.
If you’re currently in debt, don’t panic. It happens. The important thing is to take control, even if it means small steps at a time.
Remember, it’s not how much you earn, it’s how well you manage what you have.
Have you dealt with credit card debt before? Or are you dealing with it now?
Share your perspective in the comments below. Your story might help someone else out there.
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