Credit cards are a convenient method of payment for Florida residents. Many consumers are often able to pay their entire balance each month and incur no or very little interest expense. However, some households struggle to manage credit card debt. Reports show that the average amount of debt is about $5,700. However, for those people who do not pay balances off each month, the level of credit card debt is over $16,000.
Financial experts stress the importance of evaluating one’s debt situation. Is the level of debt manageable? Some experts believe that the level of credit card debt is too high if a consumer cannot pay it back within six months. Other budget coaches acknowledge there is a problem when using funds from retirement or other investment accounts to pay the credit card companies. That would indicate that debt is serious and may prevent someone from making some financial decisions.
Another suggestion is to create a budget to prevent further debt. It is critical to be aware of balances and interest rates for each credit card. Understanding this can help determine how much money could be used to decrease the debt each month. Advisors recommend using PayPal, debit cards and cash in order to stop using credit cards.
Professionals note some drawbacks to debt consolidation and also warn against a debt relapse. If someone is able to pay off credit card debt, care should be taken to not mount a large balance again. One possible alternative is to get a secured credit card with a small balance.
Some Florida residents may feel overwhelmed by credit card debt. If someone is able to pay off the debt, it is a positive step in the right direction. However, an entire shift in thinking needs to occur. An experienced bankruptcy attorney familiar with financial issues can discuss various scenarios and help develop a plan to help clients regain financial stability.
Source: nasdaq.com, “How To Manage Your Credit Card Debt“, March 30, 2017