One of our previous posts mentioned how consumers have turned to their credit cards more often in the last few months. The month of May, in particular, showed a sharp increase in Americans' use of credit cards. Some people will read into this data what they will, but it doesn't always mean that Americans are getting themselves swamped in debt. There are those who may be able to turn back time on their credit, moving back toward a place where the use of credit cards was a luxury, not a necessity.
So what are some of the best ways for Escondido residents to roll back their credit card debt? A recent article detailed five ideas to help those who are still in a position to reduce their overall debt burden.
First, the article suggests that you stop spending. This will set the total amount owed, without adding to it, allowing you to focus on the exact amount needed to pay off your total debt.
Second, attack the balances with the highest interest rates first. This will help reduce the amount of interest charges that accumulate, thereby reducing your debt load.
Third, try to increase the payments you make as you pay off one credit card after another. This will speed up the repayment process and keep you from being tempted to take the extra money and spend it on something else.
Fourth, look at potentially consolidating balances through offers for zero percent interest on balance transfers. But be wary of minimum balance transfer fees, and make sure to keep a firm reminder of when the zero percent offer expires.
And lastly, try talking to your credit card company about reducing interest rates. Inquire about potential payment plans to avoid going into default.
All of these are sound suggestions for trying to dig yourself out of credit card debt. The goal can be achieved in many cases, but when the debt burden is just too great, don't be afraid to explore other options. Consumer bankruptcy is intended to help people get out from under a crushing debt load and get back on the path toward financial freedom. For those who are unable to find a path back through traditional repayment methods, personal bankruptcy can be the best option in a bad situation.
Source: Business Insider, "The Smartest Ways To Climb Out Of Credit Card Debt," July 26, 2012