Many Michigan families rely on credit cards to supplement their incomes or to fund emergencies. Credit card debt affects millions of Americans and is a common reason people go into debt or file bankruptcy.
Filing bankruptcy is a tough decision many people face, and questions about how long a bankruptcy remains on your credit report. For Chapter 13 filers, bankruptcy can remain on your credit for up to seven years; for Chapter 7 filers, it can stay for up to ten years.
How credit card debt leads to bankruptcy
The fees associated with credit cards are recurring whether or not you use the card. Interest rates, late fees and other charges increase credit card balances making them harder to pay off monthly. Credit card debt rises quickly so careful consideration of the fees and interest is wise before accepting a credit card.
Making only the minimum payments means that interest charges increase how much you owe. Paying off the balance monthly is the best way to avoid credit card debt.
How to eliminate credit card debt
The best way to eliminate debt is by not getting into it; however, this is a unique challenge for many people. Credit is how many people build their credit rating and finance their homes, cars and vacations.
Credit cards also fund small business expenses. A more realistic approach to managing credit is choosing low-interest cards, transferring balances to more favorable ones, and negotiating with creditors.
Credit is a competitive business; many lenders will compete for your business if you have a strong credit rating. Choosing to save for emergencies and vacations and only using your credit cards for amounts you can repay quickly are smart practices that keep credit card debt under control.