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Effective ways to pay off your credit card debt

On Behalf of | Aug 15, 2022 | Bankruptcy

If you feel like you are drowning in credit card debt, it can be hard to know where to start. If you have a bit of money available, knowing which card to tackle first can vastly increase your chances of success.

Here are two options to consider:

Pay off your highest-interest debt

If you have several credit cards, it’s smart to pay off your cards with the highest interest rates first. This is often referred to as the “avalanche method” of repaying your debt. It’s possible to minimize the interest you must pay by doing this and helping you save money.

Once the credit card with the highest interest rate is repaid, you can move on to the next one.

Pay off your smallest balance first

If you don’t want to use the avalanche method, use the “snowball method” to repay your debt. With this, you repay your smallest balance first. Doing this often gives you a bit of confidence to keep going. That’s because you are actually paying off a card completely.

Remember that the cards you aren’t paying off will continue to accrue interest, which may result in having to pay more over time.

Reducing your debt and securing your financial future

If you don’t think that either method mentioned above is viable for your situation, you can file for bankruptcy. Many people fear this will destroy their credit rating, which it will temporarily, but then so will continuing to fail to pay your debts. Bankruptcy allows you to draw a line under your debts and begin to build your credit rating back up. Not only that, but it allows you to free yourself from the considerable worry debt can bring.

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