Many Escondido residents probably start to get a bit worried when they see that they are accumulating credit card debt at such a rate that they cannot pay off the balances in full each month. As many financial experts have noted, carrying over credit card debt on a month-to-month basis is essentially the most expensive way to borrow money. So, many people who find themselves in this position may be asking, what are some of the best steps to address credit card debt?
Many experts will probably recommend a few key steps. First, if a person has multiple credit cards with revolving balances, it is important to target the credit card with the highest interest rate. Why? Because ultimately the debtor paying down the debt will pay less overall in the long run. Targeting the credit card with the highest interest rate first is commonly known as the "avalanche" method.
Next, while it is important - and obvious - that at least the minimum payment should be paid each month, it is actually more important that debtors pay back more than the minimum payment each month. This has the effect of paying the debt off quicker, and debtors will likely notice on their credit card statements a section that shows the effect of paying more than the minimum payment.
Lastly, if an Escondido resident is attempting to pay off credit card debt, one important step needs to be taken: stop adding to the debt. Put simply - don't rack up any more credit card debt. Unfortunately, some people have accumulated such a high amount of credit card debt that they may feel like they won't be able to pay it all back. Escondido residents who find themselves in this situation may be able to address the issue by filing for bankruptcy.
Source: money.usnews.com, "The Best Method for Paying Off Each Kind of Loan," Geoff Williams, July 6, 2016