Residents of New York have several things they hope for in the New Year. Some have aspirations of love, more family time and even a new career. One thing that most Americans would like is less debt and more control over their finances. When someone is dealing with financial difficulties, it is often an issue that affects other components of their life. By getting their debts under control, debt reduction could be achieved.
Credit card debt is a real issue that plagues many. It is often brought on by consumers who do not have the funds to purchase the goods they seek to own, so they end up purchasing these items with their credit card. This is often a cycle, which will eventually leave the person with maxed out cards and a poor credit score.
In order to avoid and reduce these financial woes, consumers should understand their situation while also taking proactive action. They first should understand their current debts. This means how much they owe and what their payments are each month. Next, they should attempt to contact their creditors to negotiate lower interest rates. This could significantly reduce monthly payments while also reducing the total amount they owe.
Prioritizing debt is also crucial. Cards with a higher APR rate should be paid off first and more than the minimum payment due should be paid each month on all the cards that the consumer owns. Moreover, if a consumer is trying to reduce their debt and APR rate, a balance transfer could significantly benefit them.
Furthermore, they should be on top of their rates and if there is a fluctuation, they should ensure there is no error in their credit report. Lastly, consumers who fear that they will be late with a payment or will default should get in contact with their credit card company. They could work out a payment plan or avoid penalties.
Sometimes credit card debt can get out of hand, so it is important to know what possible solutions are available for debt reduction or debt relief. For some, filing for bankruptcy is the answer, but for others financial planning is the best option. Those dealing with financial hardships should seek out advice about their situation so they can take appropriate action.
Source: Main Street, “How to Reduce Your Credit Card Debt in 2014,” Billy Hardekopf, Dec. 30, 2013