Sacramento Bankruptcy Attorney is the most credible debt relief counsel for you to contact in order to explore all your options.
Credit card debt in America continues its upward trajectory as you read this article. By the end of 2016, it is expected to hit the $1 trillion dollar mark, nationwide with the average household carrying $7,500 in credit card balances. So who carries the largest burden among Americans? The answer is surprising. A recent study by the Federal Reserve Bank of New York found that subprime borrowers (individuals with a credit score of 620 or less) have actually increased their usage of credit cards this year. The study found an interesting correlation as well: as one’s credit score increases, their likelihood of taking on more debt decreased. This may not come as a surprise when one considered individuals can easily get caught in the vicious “credit card cycle” where you fight every month just to make minimum payments. If one unexpected expense arises such as an emergency home repair or doctor’s visit, you’re likely to fall back to having to reach for your credit card and charging the expense.
So is it possible to actually escape the credit card debt and bring your balance back down to zero? Yes and here are some tips on how to approach getting a handle on the debt.
- Utilize tools to help organize, plan, and track. There are an abundance of apps in both the Apple App Store and Android marketplace geared towards keeping tabs on your credit card balances. One of the more utilized is Mint.com, which is an amazing and very powerful tool that is both free and informative. It has the ability to track all your credit cards, as well as, spending. You can even use the Mint “Goals” tool to help put together a plan of attack. ReadyforZero is another tool that provides online management tools for paying off debt. You can visualized progress, set reminders, and even track your credit score for free. Using these tools will equip you with the knowledge and awareness that you’ll need to tackle your debt.
- Curb your spending. Irregular recurring expenses such as travel, holiday gifts, toiletries, and car repairs are a few of the categories that can lead to extensive credit card debt. Start by itemizing and listing all your expenses and study this list. See if there are ways to free up enough of your monthly income to pay of all debts in 2 years or less. If you complete this finance study and realize you’ll need 3-5 years, then filing for a Chapter 13 bankruptcy may make more sense and allow you to protect secured property.
- Pay with cash or debit card. If you can’t trust yourself enough to not put additional items on your credit card, cut it up, but a more sensible approach would be to put your credit card a safe place at home and pay in cash instead. This also has a more profound psychological effect as you actually see the legal tender in your hand before you hand it over which can cut spending.
- Pay off your highest interest rates first. Interest is the fee you pay in order to borrow money from the banks and credit card companies and can quickly add up to a large amount and keep your trapped in an ever ending cycle of only paying your minimum monthly amount. If you have multiple cards, it makes sense to first pay off the ones that cost you the most to have a balance on.
- Consider a balance transfer. If you’re credit score is still in good shape, it is possible to qualify for a low to no interest balance transfer. Do research for promotional offers with low rates or zero transfer fees. If you can qualify and make your payments on time, you can save a lot of money by transferring your high interest rate balances to a new card.
- Stay accountable. Accountability is crucial when sticking to a budget and lowering your credit card balance. A helpful practice is to set an accountability check every 6 to 12 months to review your pay down history and get a sense of where you stand.
- Stay motivated. By picking one account and honing in on paying it off with laser like focus, you’ll eventually be able to pay it off which will build momentum and help you stick to your plan. Dave Ramsey refers to this as the ‘snowball effect’ in which you repay one account and then immediately focus on another creating an avalanche of debt reduction.
- If you’re in over your heard or feel you have tried everything call an expert. A bankruptcy attorney is an individual who is an expert in debt relief. They are superior to a debt reduction or debt consolidation company as they can offer legal advice, represent you in court, have working relationships with trustees and judges that will handle your bankruptcy case, and can even represent you if you are sued by your creditors. Most bankruptcy attorneys will not only offer you a free consultation, but are not as expensive as one would think and most also offer payment plans as they deal with individuals in tough financial situations every day.
With hard work, diligence, and motivation you can conquer your credit card debt no matter how formidable. Take these approaches and also do additional research on how others have been able to climb out of debt. If you need guidance, have questions that you can’t find answers to, or feel that you simply can’t do it alone, call your local bankruptcy attorney and set up a free consultation to go over your options. We’ll only recommend filing bankruptcy if it makes the most financial sense in your unique situation.