On average, people in the U.S. carry about $6,000 in credit card debt. With interest rates as high as 29.99%, it’s easy to fall behind and rack up debt that’s not possible to manage. For example, if it takes you three years to pay off a living room set for $5,000 on a credit card with a 29.99% interest rate, you will have paid more than $2,500 in interest, which is about half of the cost of the furniture. Are you paying too much in interest? Find out with Bankrate’s loan calculator. Then take the following steps:
Lower Credit Card Interest Rates
If you have a sizable debt that you cannot pay off, there are a few things you can do. First, you may want to transfer credit card balances with high-interest rates to credit cards with lower interest rates. You may also want to call the credit card and ask for a lower rate. Sometimes customer service representatives will lower the rate if you have a strong payment history.
Cut Your Losses
Always a last resort, bankruptcy is the second chance many people need when debt is just not possible to ever pay off. It can take a decade or more to get a hold of finances without declaring. Sometimes it’s more desirable to start with a clean slate with bankruptcy attorney Howard County MD.
When you look at everything you spend, there are usually several places you can cut back or cut out.
- You don’t need cable to survive. You can reduce or eliminate your service or stream channels for a fraction of the cost.
- Car leases are expensive. You can save a few hundred dollars per month by owning an older model.
- Bring lunch. Eating out can set you back $50 per week or more.
When your debt disappears, your new goal can be to pay off your balance each month. If you only spend what you make, you should be able to balance your budget each month.