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Credit card debt -- what is the best way to repay the balance?

Not all of our California readers have experienced a crushing debt burden, but with the economy still struggling, many have. Whether it is mortgage or credit card debt, having a high balance and being unable to make even minimum payments can be scary, and it can have a hugely negative effect on a person's credit. However, even for those who look at the credit card in their wallet with scorn, there are some repayment strategies that could be put into effect in order to start whittling away at that big balance.

First of all, if accumulated credit card debt is spread over more than one card, there are steps to take to consolidate the debt so that a single payment each month will go toward the total. A personal loan could be an option, as long as the interest rate saves you money in the long run. If balance transfers are available, that is another option to get all of the balance together into a singular target.

For homeowners who have equity in their house, a home equity line of credit could provide an even lower rate than a consolidation loan. Admittedly, however, with the millions of American homeowners who currently find themselves "underwater," this may not be an option for many in the most desperate of situations.

Whichever option is available, our readers should be sure to do some thorough research to ensure it provides the maximum benefit. Getting the balances all together can be the first step toward successfully repaying the balance. A single target with a single, non-varying interest rate can be the foundation for getting that unmanageable debt paid down. However, if none of these options are available, the next step may be to consider filing for bankruptcy, in which the amount of debt which is not paid off in the end would be discharged.

Source: NY1, "Repayment Strategies Can Help Reduce Credit Card Debt," Tara Lynn Wagner, Sept. 20, 2012

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