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Credit card debt: How can you minimize it?

| Aug 7, 2020 | Chapter 7 Bankruptcy

Florida residents may not be aware that credit card interest is based on one’s account’s average daily balance. That means every day a payment is not made is a day that more interest is added. Therefore, people should not wait until their due date to make their payments—they should be trying to pay off their balance twice a month, if not weekly. Not only does this approach pay down credit card interest and thus debt, but also ensures one is paying the bill instead of using the money towards something else. It is important to make sure that at least one payment meets the monthly minimum payment.

Two common strategies

There are two common strategies for paying off credit card debts. One is by focusing on paying off the one with the highest interest rate first, as this reduces interest costs. Another is to pay off the smallest balance first, so as to achieve a quick win. This gives one momentum towards paying off a larger balance.

Individuals may also be able to qualify for a balance transfer credit card or a personal loan to consolidate their debt. Giving a look over one’s budget is also a good idea, to cut off unnecessary spending.

You may also need professional assistance

While many find these strategies work for them, not everyone is able to pay off their debts and get control over their finances. Those who are overwhelmed by them may want to consider filing for personal bankruptcy, either Chapter 7 or 13, to discharge unsecured debts. Chapter 7 bankruptcy can help people restart their financial lives while also retaining possession over some of their property such as the house and car up to a certain value.