Most Americans have credit card debt. According to a survey by the Federal Reserve, the average U.S. household carries over $16,000 in credit card debt. More than half of Americans surveyed by the Federal Reserve have said that they carried a credit card balance at some point in their lives. Many Americans spend more than they make in a year, and have to take on debt just to get by. The Federal Reserve is planning to increase interest rates in the near future, which means the cost of borrowing will be even greater, and starting to manage your debt now is the smartest decision you can make. Keep reading below for some strategies on how to start tackling your debt.
Strategies Used to Fight Credit Card Debt
- Positive momentum: You need to start small, to gain positive momentum to keep moving through your debt. This strategy recommends that you start by paying all your credit card minimum payments, then any additional money can be used to pay off your balances, starting with the smallest one. This will allow you to start gaining forward progress to work towards repaying the next highest balance.
- Top -down strategy: This strategy recommends that you choose the credit card charging you the highest interest rate to be paid off first, so from there, your debt will seem more manageable.
- Combination strategy: This is a combined approach of the first two listed. You can start with momentum from the small balances, then switch to paying off the highest interest rates right after.
Getting Additional Help
These strategies are a few of many that can be very helpful to start getting your debt under control. There are many options to repaying debt, but for some, the amount of debt may be too high to repay on their own. Bankruptcy could be the best option for starting to live debt free.
Lewisville Bankruptcy attorneys at Shuster Law Firm PLLC have experience settling many complex debt cases.