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Dealing with credit card debt and conquering it

Unfortunately, encountering financial problems, no matter how small, is not uncommon for Michigan residents. While some individuals and families are able to timely and fully address these temporary issues, others are not so lucky. For some credit card holders, debt can rack up quickly, causing it to become unbearable. For these individuals, it is important to understand ways to better manage their debt and conquer their financial troubles.

Dealing with credit card debt is not an easy task, but a recent report by Fox Business broke it down into four methods that could assist debtors with their current and future debt. Whether they use one, some or all of these methods, if properly used and consumers change his or her spending habits, the debtor could obtain a healthy financial life.

One method is to pay off the most expensive card first. A debtor should arrange their cards in order of interest rates. The card with the highest rate should be paid off first, followed by the next highest card. This might require minimum payments to be paid on these lower interest cards while the highest card is being paid off, but this payment method could really help a debt regain control of their finances.

Next, a debtor could do a balance transfer. This means transferring the balance from a high interest card to a lower interest card. In some situations, the debtor will be able to complete the transfer to a card with a zero percent interest rate for a certain amount of time. While this is a huge benefit for being able to get a better handle on debt, there are some down sides. This could impact the consumer's credit score because it might require them to open up a new line of credit.

There are a few other options, such as taking out a home equity loan, or a debtor could borrow from a 401K retirement plan. In these matters, a debtor could borrow up to 50 percent of the value of their plan or up to $50,000. This could require the debtor to pay back this money through payroll deductions within a certain timeframe that also includes interest payments, in addition to other drawbacks.

While these methods could help a credit card holder get a handle on their debt, it might not help them fully address their debt problems. In these matters, debtors should be aware of other debt relief methods such as filing for personal bankruptcy.

Source: Fox Business, "4 Easy Ways to Conquer Credit Card Debt," Kristin Bianco, April 3, 2015

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    "... I was extremely impressed with Charles' understanding of the bankruptcy laws to the extent that I felt certain that my best interests were always at the forefront. "

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    He helped me thru my 1st bankruptcy and now the second. I had no idea what to expect , but they kept me informed and answered all my questions. Mr. Schneider is the most experienced and knowledgeable lawyer I have ever met. If you have to file call this attorney first!

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