3 Smart Tips to Manage Your Credit Card Debt in 2023
Did you know that 35% of Americans carry a credit card debt month to month which is a 6% increase from 2022? This is as per a study of 2,458 US adults in January 2023. Another survey found that Americans’ total credit card balance is $986 billion in the 4th quarter of 2022 as per recent data by the Federal Reserve Bank of New York. Good planning and perseverance are the keys to addressing these issues.?
Credit cards offer benefits like:
But all these may lose shine if you have an ugly debt on your shoulders. It becomes tougher to manage the outstanding balance and afford even the basic payments. The good news is that there are a few moves that can help you come out of the trap. Read on.?
1. File a Bankruptcy?
This can be used to discharge unsecured debts like credit cards in which your non-exempt assets can be liquidated to raise money. Now the amount that was owed is erased. No wonder it is also referred to as ‘liquidation plan’. An ‘automatic stay’ will be imposed on you right after the case has been filed. No creditor is allowed to take actions against a debtor during this period. This includes calls, threats and similar collection attempts.?
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It is vital to work with an experienced attorney who will conduct negotiations that satisfy both parties. But know that a Chapter 7 bankruptcy stays on your credit report for up to 10 years from the date of filing. You will have to wait for the credit bureaus to remove it.?
2. Debt Consolidation
It is helpful if you have more than one card debt running simultaneously. Merge all of them into a single debt and use a standard personal loan to pay it off. You can also use it to lower your monthly payment and ease your financial life. The credit utilization rate can also go down below 30%. Consolidation is usually a good idea if you have high-interest debt and a decent credit score. This is because applying for a new loan will dip the score a bit due to the hard inquiries. Having a high score will make sure you still do not completely lose the ability to borrow a loan for future requirements.?
3. Talk to your Creditor?
Explain your situation to the lender. Make sure you have enough evidence to prove your point. Approach them only if you have genuine reasons like a medical emergency, theft at home or employment. Talk in a convincing, calm and composed tone. These could be helpful if you have been a long-time customer with them. The issuer may either lower the interest or eliminate the credit card fee. Now you can get better control over your credit card debt instead of struggling to make ends meet.?
Debt can be a common occurrence in the current economic condition. The most sensible solution would be to work with a bankruptcy lawyer in New Jersey. They will discuss every option and even out-of-court ones to fetch the best results for you.?