Many Florida residents and others around the nation have a variety of credit cards at their disposal. Unfortunately, if not managed correctly, consumers may end up with a significant amount of credit card debt. Experts recommend several tips for managing credit card debt and improving credit scores.
It is important to pay more than the minimum payment due each month. Failure to do this can result in the assessment of late fees. Credit scores can suffer if someone has a pattern of making late payments. The scores are calculated by someone’s performance in categories such as new credit, balances and payment history. It may be helpful for some to establish automatic payments to avoid missing payments and having credit scores suffer.
Credit scores can also drop if someone’s credit card balances go above 30 percent of the total credit line. Going over that amount can be perceived as a risk to creditors. Experts also suggest picking a strategy to paying off credit card debt and sticking with it. Whether someone pays the card with the lowest balance first or the one with the higher interest rate, consistency is the key.
Paying off credit card balances is important in reducing or eliminating debt. High balances mean increased interest payments, so it would be helpful to pay the balances as quickly as possible. However, even if a card is fully paid off, it is recommended to keep the card. Closing it could negatively impact credit scores.
While credit cards are a convenient tool, they can cause significant problems if not used appropriately. If credit card debt seems insurmountable, it would be wise to speak with a Florida bankruptcy attorney. An experienced lawyer can review a client’s finances and develop a plan to get them back on track.
Source: money.cnn.com, “The smartest way to pay off credit card debt“, Danielle Wiener-Bronner, Aug. 10, 2017