Get your debt under control

Getting into debt because of credit card use can be overwhelming but Nirmala said there is not shame in getting help. — 123rf.com

Nirmala Supramaniam, the head of Household Financial Education Department at the Credit Counselling and Debt Management Agency (AKPK), advised shoppers to avoid buying multiple products online just to save on shipping.

“Most websites or platforms require a minimum purchase to qualify for free shipping. Many people tend to overspend to reach the minimum purchase thinking that they are saving money by avoiding the shipping cost.

“In reality, they are just spending more money on things they don’t need in the first place,” she said.

She also recommended using a debit card instead of a credit card for online purchases.

With a debit card people can only spend the money they have but using a credit card could lead to overspending and debt, she added.

Overwhelmed by online shopping debt? Nirmala says it’s best to seek solutions early. — AKPK

She also advised shoppers to practice the 24-hour rule – wait for 24 hours before deciding to make a purchase whenever possible.

“Make sure you unsubscribe to any mailing list that regularly sends alerts about sales that you cannot miss. These are mostly marketing gimmicks to lure you into buying things you probably don’t need,” she said.

Overspending once in a while is OK, she said, as the person may really want a particular item or service.

“The problem arises when we spend too much for our wants which could lead us to overspending on holidays, fine dining and branded goods using credit cards,” she said.

Most would turn to AKPK for assistance when they feel their credit card debt is no longer manageable.

“Basically, many would start seeking help when they are constantly called or harassed for payment. Or when they realise that their credit score is too low to successfully apply for a new loan,” she said.

Those who find themselves overwhelmed by debt due to online spending and want to start taking control of their finances will first have to acknowledge the problem, said Nirmala.

“If you are facing cash shortage or constantly receiving reminders on repayment, you have a problem. Don’t sweep the issue under the carpet, seek solutions early and there is nothing to be ashamed of,” she added.

Those who need help with their debt can join AKPK’s Debt Management Programme through which the agency will negotiate with financiers for a restructured payment scheme that is more manageable for the borrower.

AKPK, which also offers counselling, was set up by Bank Negara to help people take control of their finances. The agency can be reached at [phone] or via its website.