How to eliminate revolving debt

By Marrero, Chamizo, Marcer Law, LP,

Residents of Florida who have credit card debt are not alone: 38 percent of American households carry credit card debt from month to month. Letting credit debt roll over instead of paying it off each month is called revolving the debt. Experts suggest ways that someone with revolving debt can work towards being a transactor, which is someone who pays off their credit cards each month.

To cut down on interest, it may be possible to move debt from a high-interest credit card to a lower-interest one, but caution is advised when doing this. Sometimes cards offer temporary low rates on interest that will go up after a period of time. Experts say people should read the fine print of any offers for new cards before transferring a balance and also be aware of any fees that may be charged.

A debt consolidation loan can combine the balances of several credit cards into one loan with an affordable monthly payment and an interest rate that is often lower than credit card interest rates. When credit card debt is overwhelming, a credit counselor could be of help in negotiating with creditors and determining the best option for debt relief.

Acquiring cash to pay off debt could be facilitated by doing a good housecleaning and selling items that are no longer needed, considering a less expensive car or even asking for a performance review at work to see if a raise is in order.

Bankruptcy is often seen as a last resort for people who are unable to pay their debts. While bankruptcy can eliminate most credit card debt, it does not clear all debt, and it stays on a person’s record for several years. The most common types of bankruptcies for individuals are Chapter 13 and Chapter 7 bankruptcies. Chapter 13 requires monthly payments on debt for a period of three to five years, after which remaining debt is dismissed. Chapter 7 liquidates non-exempt assets to pay creditors, and then the remaining debt is dismissed. Someone who files Chapter 7 is usually able to keep his or her home and car as they are exempt from liquidation.