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Strategies for avoiding and reducing credit card debt

Avoiding credit card debt is much easier than recovering from it. As the balance on the card increases, the amount of interest that is accrued each month increases with it, requiring larger payments. These higher payments can make it more difficult for the consumer to pay for current and future expenses. This is why a repayment plan may be vital for any South Carolina residents attempting to recover from credit card debt. The plan should include reducing spending, speaking with creditors about reducing interest rates, suspending further credit card usage and prioritizing payments based on the interest rates.

Consumers should always use credit cards wisely, which includes tracking every expense that they charge to the card. A good strategy for many people is to ensure that they do not use more in a month than they can afford to pay when the bill arrives, which can help them to avoid interest charges. Using cards as short-term loan tools can be effective, but leaving the balance for a long time can result in large interest rates.

Some consumers choose to settle the debt with the credit card company, which will sometimes accept less than the outstanding balance to cancel the debt. Most of the companies require the payments to be delinquent by a few months before they accept these offers, and the government may count the difference between the amount paid and the amount owed as taxable income for the consumer.

Consumers with credit card debt can select from a variety of strategies to repay it, and an attorney may be able to help them understand the benefits and consequences of each option. Bankruptcy is normally a last resort for many consumers because of the long-term effect that it has on their credit, but it may be beneficial to some.

Source: Credit, "8 things you must know about credit card debt ", Erica Sandberg, November 24, 2014

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The Huggins Law Firm, PA

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