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Common strategies for paying off credit card debt

| May 16, 2019 | Credit Card Debt Relief |

Consumers throughout the country owe more than $1 trillion in credit card debt. While an increase in credit card debt may be good for the economy as a whole, it isn’t necessarily a good thing on a personal level. However, there are ways that a North Carolina resident can reduce or eliminate credit card debt balances. These strategies are called the snowball and the avalanche methods.

The snowball strategy says that a debtor pays down the credit card with the lowest balance first. Once that balance has been paid off, a debtor will focus on the card with the second-highest balance. This process continues until all credit card balances have been paid off. The snowball method can be ideal for people who want to see progress paying down their debts in a short period of time.

Those who use the avalanche method will pay off the balance with the highest interest rate first. By using this method, an individual saves money because he or she accrues less interest while debt balances are repaid. However, it may take longer to see any tangible progress in paying down principal balances. Finance professionals say that while the snowball method works best for most people, the goal is to find the method that works best for a given individual.

Those who are seeking an effective form of debt relief may want to file for bankruptcy. Filing for bankruptcy may make it possible to have credit card debt discharged entirely. This means that debtors are no longer obligated to make payments to creditors. Furthermore, debtors may be able to keep property during or after a bankruptcy proceeding. An attorney may provide more insight into why a person could want to pursue bankruptcy as a debt relief strategy.