There are many ways to tackle debt, but some tried and true suggestions are the best ones to help get your debt back on track. Whether you're dealing with thousands or tens of thousands of dollars of debt, these simple changes can help you get ahead of it.
One reason that so many people get into trouble with credit card debt is because it's easy to rack up debt without having to pay much back at once. For example, a credit card with a $1,000 limit may only have a $25 monthly payment. With such a low payment, it's easy to max out the card.
The problem with this is that interest adds up. If you never pay more than the minimum, you'll pay on the card for years before you are free of debt, even if you make your payments on time each month.
The average debt per household in this country is around $15,956. However, that number can double or even triple over the amount of time it takes to pay that debt off. It might seem like you'll never be able to pay off a credit card, but there are a few ways to do so.
First, ask your creditor for a lower interest rate. If you have a good credit score, you may be able to get a lower rate. If you opt into a direct-withdrawal payment, then you might be able to persuade the company to lower your rates, too.
Another thing to try is to pay off one card at a time. Adding even $10 to a minimum payment makes a difference. Focus on paying off one card at a time.Once a card is paid off, use that money to pay down even more debt on other cards.
If you don't think that simple changes are enough, there are options such as bankruptcy or debt settlement that could work for you. Your attorney can help you decide on the best path forward if you think those might be a better choice for your situation. With the right choices now, you can soon be in charge of your finances and have a solid base for future financial decisions.
Source: Real Simple, "How to Eliminate Credit Card Debt," Vera Gibbons, accessed May 01, 2017