For many people, credit card debt is the one area of their financial life that may be the most confusing and difficult to handle. Credit card bills can lead to a disruption and destabilization of a Florida family’s budget and economic outlook. The key to dealing with overwhelming credit card bills and debt is to understand how credit cards and, particularly, interest rates work.
Interest is charged each month on the balance of a credit card. If a credit card bill is paid in full every month, there will be no interest. Credit card interest rates currently run between 12 and 22 percent. Anything above or below that amount may be unusual.
Interest is also calculated based on the average daily balance. This means that, if it is a longer month — a 31-day month — there will be more interest charged on the bill for that month. One way to avoid paying high interest rates, especially if there are multiple credit cards being handled, is to transfer the balance of all cards to one card with a low or 0 percent introductory interest rate. Then, one can pay the balance off in the allotted 0 percent interest rate time period.
While exploring the option of a balance transfer may be economically sound for most people with overwhelming credit card bills, there are other options. People in Florida who struggle with any kind of debt, especially credit card debt, may be interested in inquiring about bankruptcy. Some forms of bankruptcy can help people pay off debts over a set period of time or help people discharge debt they simply do not have the means to pay.
Source: The Huffington Post, “The Easiest Way to Stop Paying Interest on Credit Card Debt“, , Aug. 22, 2014