Residents of Arkansas join millions of others throughout the country in debt, with many Americans positively swimming in bills, credit card charges, and other money owed to creditors. In a good many of these cases, debtors are “juggling” debt rather than paying any one thing off, but they could turn to debt settlement or other reputable means of paying down debt.
Paying the minimum balance on revolving accounts, such as credit cards, never allows the debtor to make any leeway against the bottom-line number. The same is true for balance transfers and payments made to cover only the interest accrued. Financially, the key to getting rid of overwhelming debt is to put back money regularly while staying on top of payments until the time to tackle them head-on arrives.
At that time, the focus should be more on paying the principal amount of any loan, credit card debt, or other form of payment plan. To accomplish this, one should never make just the “minimum payment” on any owed amount. As a debtor continues to make the lowest-possible payment, the principal will, over time, decline. With that principal decrease comes a lower minimum payment. This is great, on the surface, but in reality only serves to prolong the number of years a debtor must make payments. To make a true dent in any debt, one should continue paying the same amount each month in order for increasing amounts to be applied to principal.
Paying down debt can be difficult, especially when so many Americans rely on credit cards. Sometimes debt can become truly overwhelming. If this is the case, it could be time to find out more about bankruptcy options by consulting with an attorney who has experience in that area.
Source: FOX Business, “Fastest Way to Pay Down $50K Credit Card Debt“, Steve Bucci, July 31, 2014