The consequences of overspending can prove costly for Florida families. For many, overspending can result in a large amount of credit card debt. In the short term, it may mean that a consumer has less money to use for current needs since there are fees and interest to be paid. For the future, someone would likely be left with less money for investment. While reducing or eliminating credit card debt is often a goal for consumers, approaching it the wrong way can lead to a negative impact on finances.
In a recent interview with personal financial analysts, a mistake made when paying down credit card debt was discussed. Many consumers make only the minimum payment required on their balances. Most have no idea what impact that decision has on either the amount of interest to be paid or the time it will take to pay off the balances.
One example shared was for a credit card balance of $16,000 — the amount an average household owes. If someone paid only the minimum balance each month, it would take about 20 years to pay it off. The amount of interest would be over $15,000. The recommendation would be for cardholders to truly examine their spending and determine how to dedicate more funds to eliminate that debt. Also, while credit card companies now include payoff information on statements, many consumers don’t carefully review the information each month.
If credit card debt is overwhelming for Florida families, many seek the guidance of a knowledgeable bankruptcy attorney. An experienced debt relief lawyer can help evaluate a situation and determine the best course of action. Working with a strong legal team to develop a plan is a step in the right direction toward getting one’s finances back in order.
Source: fool.com, “1 Mistake to Avoid When Paying Off Credit Card Debt“, Nathan Hamilton, May 6, 2017