Options for addressing burdensome credit card debt
Debt is a reality in the lives of many Michigan residents. While some debts, like mortgages and car loans, are necessary for the acquisition of large purchases, others happen because of unexpected life changes and emergencies. A Southfield resident may go from carrying no credit card debt to having and extensive credit card balance in a matter of months if they are involved in an accident or lose their job.
Credit card debt is a problematic form of debt because it often balloons before a debtor has a chance to manage it. This post will discuss why credit card debt can be a problem and what individuals can do to address it. This post does not provide any financial or legal advice, and all readers can take their questions about credit card debt to their trusted debt relief and bankruptcy attorneys.
How credit card debt gets hard to manage
Credit card debt gets hard to manage because many credit cards are subject to high interest rates. When a person fails to pay off their monthly balance, the amount that is carried over is charged interest. Interest can compound quickly and turn a moderate credit card balance into a massive one.
Though not everyone can pay off their credit card balances each month, only paying the minimum on a credit card each month can also be problematic. If a person only pays the minimum on their card, it may take them years to finally get back to 0 on their credit card balance. Over the course of their payments, they may spend thousands of extra dollars just trying to eliminate interest on their principle.
Addressing debt on credit cards
Debtors can address credit card debt in number of ways. They can work to make more than the minimum payments on their credit card balances each month, and they can work with their credit card companies to create payment plans that may better serve their ability is to pay. For some, prioritizing credit card that may help reduce their balances, but some debtors may need more help to overcome their financial burdens. Bankruptcy may be an option for those who wish to discharge debts and have a fresh start without looming credit card bills.