When people give financial advice, they invariably talk about how important a savings account can be to any financial plan. The problem is that when a consumer is struggling just to pay the bills, is living off of credit cards and contemplating filing bankruptcy, it may not make much sense to start a savings account. The question then becomes how to get out from under a mountain of credit card debt.
The first thing many New Jersey consumers may need to do it take a step back and figure out exactly what their financial situation actually looks like. Once a comprehensive list of debts, minimum payments and income has been made, a consumer can then figure out where to start. Many financial planners advocate paying off the credit card with the highest balance first. Put as much money toward that debt as possible each month in order to get it paid off as quickly as possible.
Meanwhile, only making only the minimum payment possible on time each month on all remaining debts will ensure that the consumer doesn’t get incur any late fees or adverse credit reporting for late payments. If possible, acquire a zero interest balance transfer credit card and put as much high interest credit card debt on it as possible. This will provide a specified amount of time to pay down that debt without paying any interest.
Of course, not everyone in New Jersey will have the ability to implement a plan such as this. For people that simply aren’t in a financial position to pay off their credit card debt, bankruptcy may be the best way to find some financial relief. Once debt free, putting as much money into savings as possible may help ensure the situation never happens again.
Source: business2community.com, “4 Rules for Paying Off Credit Card Debt,” Logan Abbott, May 1, 2013