Outstanding credit card debt can have a significant impact on your ability to start a family, buy a car or purchase a North Carolina home. However, there are several strategies that you can choose from to pay down those obligations in a reasonable amount of time. Depending on your financial situation, it may be possible to eliminate outstanding balances for a fraction of what you actually owe.
A balance transfer can be helpful if you have good credit
If your credit score is higher than 640, it may be possible to transfer your existing balances to a new card with a lower interest rate. In addition to reducing your monthly payment, you’ll only have to keep track of a single monthly payment. This can help to reduce the risk that you’ll forget to pay your lender in a timely manner.
What if a balance transfer isn’t available to you?
In the event that you’re stuck paying down multiple balances, you’ll need to create a plan to efficiently eliminate them. The snowball method is a popular way to provide yourself with the motivation necessary to accomplish your debt reduction goal. If you use this method, you’ll put extra money each month toward the card with the lowest balance. Once that card has been paid in full, extra payments will be applied to the card with the lowest remaining balance.
Bankruptcy might be an option
Filing for Chapter 7 bankruptcy can be an effective way to eliminate credit card debt if you have few nonexempt assets. The same may be true if you don’t have sufficient disposable income to pay your creditors in full within five years. An attorney may be able to provide more insight into the possible benefits of doing so.