O'Brien Law Firm, LLC - Bankruptcy

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Tips for paying off credit card debt

Mississippi residents have helped Americans as a whole generate a total of over $1 trillion in credit card debt. Those who want to pay off that debt have several options to do so. However, the best option may be to start with the credit card that has the highest interest rate. This is because reducing the principal balance on that card also reduces the amount of interest paid to a lender.

Ultimately, people will be able to pay their debt down faster if more of each payment goes toward the principal instead of interest. Once a credit card balance is paid off, a debtor will then start paying down the balance with the next highest interest rate. While it may take longer to pay down a debt using this method, it will save a person money in the long run.

To speed up the process of paying down credit card balances, they should be transferred to a card that has a zero percent introductory interest rate. This will result in all of a given payment going toward the principal balance. Another way to pay down debt faster is to make payments every two weeks instead of once a month. Doing so means making the equivalent to 13 monthly payments, and that can also result in more money going to the principal balance.

Individuals who are looking to eliminate debt may do so by filing for Chapter 7 bankruptcy. Credit card debt can often be discharged without a debtor paying any of the outstanding balance. Once a debt is discharged, a debtor has no obligation to repay it. In most cases, a debtor is entitled to an automatic stay of creditor contact after filing for bankruptcy.