Credit cards are a useful financial option for many Connecticut residents and others around the nation. However, their use can also wreak havoc on a person’s debt levels, credit scores and overall financial health. In fact, many consumers must seek debt relief to rid themselves of the burden of credit card debt. Financial experts offer some advice on how to effectively reduce or eliminate debt from credit card usage.
Many advisers recommend obtaining a personal loan, most often unsecured with a fixed interest rate. Typically, the interest rates are considerably lower than those for credit cards, thus creating an opportunity to save some money. Various loans are paid off, leaving just one consolidated payment to make. Instead of debt consolidation, someone may also decide to use a personal loan to pay off one high interest credit card balance.
Some may opt to transfer credit card balances to another card with a zero percent interest rate. Consumers then pay off the balance before an introductory period ends and interest begins to accumulate. Another option is to take advantage of rewards programs offered through the credit card companies. This is only beneficial if a person can pay off the balance in full each month.
A common recommendation is simply to have a financial plan in place. Having a thorough understanding of one’s debts, the balances due, payment information and rates is important. Identifying which debt is most expensive can help someone know where to focus his or her efforts.
Carrying a large amount of debt can be overwhelming, leaving consumers at a loss about what action to take. A Connecticut bankruptcy attorney can help a person determine what steps to take next. An experienced lawyer will develop a specific plan for a debt relief. Various strategies, from developing an effective budget to filing for Chapter 7 or Chapter 13 bankruptcy, will be evaluated for each specific client’s situation.