Tackling Your Debt in the New Year

2024 was supposed to be your year to pay off your credit card debt.  So were 2023 and 2022.  You made progress on your debt several years ago by making gig work your pandemic hobby.  When most of the distractions were closed to everyone except the one percent who can afford to rent out entire venues and hire private jets, there was nothing to do but stay productive.  By the time the schools and restaurants reopened, you had seen with your own eyes that you don’t need to spend money to have fun or find meaning, but you did figure out that children need social interaction, and so do adults.  The money you spent hosting modest birthday parties for your children and taking them to indoor playgrounds on summer days that were too hot or too stormy for outdoor play did not, by themselves, break the bank.  Rather, the problem was that everything is too expensive.  You put every penny you could afford into credit card debt repayment last year, like you did in the preceding years, only to see your debt balances move in a zigzag fashion.  Despite your best efforts, you ended up taking on even more credit card debt during the 2024 holiday season.  If you need guidance on a credit card debt repayment strategy for 2025, contact a Miami debt lawyer.

Avalanche, Snowball, or Balance Transfer

Debt repayment strategy isn’t just about how much you owe now; if only it were so simple that you could just keep getting payments, and the amount you owed would just keep getting smaller.  The most irksome part about credit card debt is the interest, unless you count the late fees.  Therefore, your goal is to pay down the balances faster than the news charges add up.  These are the three main approaches you can take:

• Balance transfers – Move as much of your credit card debt as you can to a new card that offers an interest-free period, usually 12 or 15 months. Then put all your effort into paying off the transferred amount before it starts accruing interest. Even if you don’t get the balance all the way to zero by the end of the interest-free period, you will have paid off some of your debt without accruing new interest on it.
• Avalanche method – Put all your extra cash toward the debt with the highest interest rate. This way, you save the most money on interest over time.  This is the debt repayment strategy that economists recommend.
• Snowball method – This is the preferred method for debtors. You start with the debt with the lowest balance.  This way, as the months pass, you have fewer cards to pay off and more money to put toward debt repayment.

If you have already tried these, consider a debt consolidation loan, debt settlement, or filing for bankruptcy protection.

Work With a Debt Lawyer About Credit Card Debt

A South Florida debt lawyer can help you if paying off credit card debt is your New Year’s resolution.  Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.

Source:

cnbc.com/2024/12/26/36percent-of-american-consumers-took-on-holiday-debt-averaging-1181.html