How to pay off credit card debt
According to an analysis conducted by WalletHub, consumers in Florida and the rest of the nation accrued $34.4 billion in credit card debt from April to June of 2016. WalletHub and MarketWatch estimate that a total of $1 trillion of credit card debt could be achieved by the year’s end. Consumers who are overwhelmed with credit card debt may benefit from learning about methods for paying down balances.
There are certain steps individuals should take before choosing a repayment method. For starters, they should create a budget that will help them avoid a similar debt situation in the future. Keeping an account of what is spent each month and focusing on a particular credit balance will also be necessary.
One method of repayment is the avalanche method, which applies any extra funds to paying off the balance that contains the highest interest payment. This method allows individuals to tackle the debt that will increase the fastest. The credit card statements can be reviewed to verify the cards with the highest rates of interest. Individuals who prefer to see the instant effects their payments may have on their credit card debt may prefer to use another repayment method.
The snowball repayment method prioritizes the credit cards with the smallest balances. It can motivate individuals who are watching their debt being reduced in real-time. Individuals should be aware that the cards with the smaller debts may not have the highest interest rates, and they may pay more in interest for others cards in the future.
Individuals who are looking for debt relief may consider a variety of solutions, including legal processes like Chapter 13 bankruptcy. A bankruptcy lawyer may evaluate a client’s financial situation and provide tailored advice regarding the most effective and appropriate methods that can be used to resolve substantial debt.