Many people in Fort Lauderdale, Florida, may feel pressure to purchase gifts for friends and family members during the holidays that do not actually fit into their budgets. While some people can manage the larger payments necessary to eliminate the debt during the first part of the year, others may discover that the cost is much higher than they anticipated. For these credit card holders, extra steps may be needed to get back in the black.
If a person’s regular income is not going to cover the extra needed to make the larger payments, Fox Business News suggests using a tax refund to eliminate the balance. That may seem unreasonable to those who look forward to spending that lump sum. However, when it is compared to the amount that will be paid to the credit card company during the next 12 months, the savings from wiping out the high interest debt may be surprising.
When extra money is not on the way, Local 10 News recommends that people evaluate the total owed on all credit card debt and determine whether making payments higher than the minimum is possible. The debt with the highest interest rate should receive priority, but this does not necessarily mean it should be the focus of larger payments.
It may be more effective to transfer the highest balance to a card with a better interest rate, or consolidate all the debts onto one account. Then, a person can evaluate the total amount and set up a plan to pay it off in a year or less. For those who do not have the resources to deal with crushing debt, bankruptcy may be an option to receive a fresh start.