The average interest rate on a credit card balance is 21.5%, which is the highest since the Fed started tracking such rates in 1994. Interest charges and fees may make it difficult for Michigan residents to pay down their balances in a timely manner. However, there are steps that you can take in an effort to regain control of your finances.
Start with the most expensive debt
One way to deal with your debt is to use the avalanche repayment method. Using this method means that you target the balance with the highest interest rate. Although it may take longer to pay down a given balance, it will save you money in the long run if you stick to the plan.
Ask lenders for relief
A creditor may agree to temporarily reduce your interest rate in an effort to help you get current on your credit card debt. In some cases, they may waive interest charges entirely for a period of several months to help you get current. Alternatively, you can try to transfer an existing debt to a card with a lower interest rate. A debt consolidation loan may help you reduce the interest rate on credit card and other debt balances. This may help you get current on all of your obligations or even begin to pay them off before inflation continues to eat away at your wages and purchasing power.
If you are struggling to pay credit card or other bills on time, bankruptcy may be an option. In a Chapter 7 case, you may be able to have some or all of your debts reduced or eliminated without losing property or making any payments to your creditors.
