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Lower interest rate can help to combat potential Chapter 7

Credit card debt in the United States reached a record high in Dec. 2018, making it one of the most pressing financial issues facing everyday Americans. What many Kentucky residents might not know is that there are several ways of reducing the interest on a credit card, making it easier to pay down existing debt. This can help to avoid more involved debt management options like consolidation or Chapter 7 bankruptcy.

Many financial experts agree that the easiest way to get an interest rate on a credit card -- typically somewhere around 19.5% per annum -- lowered to a more reasonable amount is simply to ask. A recent survey suggests that of everyone who reaches out to their credit card company to negotiate a lower rate, some 81% received one. Unfortunately, only one in five people make such requests. 

Chapter 7 bankruptcy may help consumers struggling with debt

When it comes to managing and paying off debt, it is important to understand just how much debt is involved. However, Kentucky consumers who are dealing with significant amounts of credit card debt might find it uncomfortable to get into the details. A recent report from a leading news magazine reveals just how widespread the problem of ignoring debt might be. For these individuals, it might be a good idea to consider the potential benefits of Chapter 7 bankruptcy.

The survey found that 40% of American consumers carry some type of balance on their credit cards. Of those, nearly a quarter owe over $10,001. A significant number of consumers also reported that they purposely limit their spending because of their debt, and 13% even say they cannot always make ends meet.

Chapter 7 and other ways to handle credit card debt

Recent studies suggest that some six in 10 Americans are carrying some form of credit card debt, usually between $6,000 and $7,000 depending on generation. While using a credit card responsibly can lead to better credit and more financial options, some Kentucky residents know all too well the cost of carrying a balance month over month, or even year over year. A variety of strategies exist to help get Kentucky residents out of debt, from consolidation to Chapter 7 bankruptcy.

Credit cards carry notoriously high interest rates, and paying the minimum monthly payment can make little to no dent in existing debt as a result. One possible way to handle this is to consolidate all debt into a payment with a lower interest rate. Sometimes this can be done using a balance transfer card to pull multiple debts into one monthly payment, while others may benefit from using a personal loan to pay down higher-interest cards. 

Avoiding Chapter 7 through responsible credit use

Most Americans carry a balance on their credit cards, which can be counterproductive if the aim is to reduce the overall amount of debt they are responsible for. Here in Kentucky, credit card spending is very common, and it has caused serious problems for some families who are unable to handle the level of debt they have accrued. Before seeking out a solution like Chapter 7 bankruptcy, it might be helpful to consider other potential remedies as well. 

It may seem rudimentary, but if it is at all possible, paying down a credit card's balance in full every month is a good way to ensure debt never gets to the point where it is unmanageable. Every balance left unpaid accrues interest, and with many credit cards charging nearly 20 percent in interest, this can add up quickly. This is particularly true in cases where a credit card has been maxed out, which can adversely influence credit ratings. 

Avoiding Chapter 7 through careful planning

As a general rule, using credit is an unavoidable requirement of everyday American life. This is not always a bad thing, since measured and responsible credit use is what helps build positive credit ratings toward larger life goals, but sometimes, as some Kentucky residents can attest, it can get out of hand. While options like consolidation and Chapter 7 bankruptcy exist, there are a number of credit card "don't"s that, if avoided, can help to preserve financial health. 

A major stumbling block for many consumers is the credit card minimum payment: the amount the lender requires to be paid in a given month. Unfortunately, paying only the minimum means paying only the interest on a card, which in turn means the principal balance is barely affected. This can lead to months or even years of debt, with the card holder paying thousands in interest along the way without paying down the debt itself. 

Baby boomers facing retirement years in poverty

When you consider your retirement years, what comes to mind? Leisurely mornings dawdling over a second cup of coffee at the breakfast table, traveling with your spouse or perhaps volunteering your time at a charitable organization in Lexington?

Unfortunately, the financial insolvency of some senior citizens means there will be none of the above during their golden years. Instead, these older Americans will continue to work and struggle mightily to keep their utilities on and food in the refrigerator.

Avoiding the need for Chapter 7 bankruptcy

There are a variety of financial challenges that can present themselves to the average American. Here in Kentucky and elsewhere in the nation, credit card debt is a matter of pressing concern for many people. Thankfully, there are a variety of strategies that can be used to improve financial strife before Chapter 7 bankruptcy becomes a viable option. 

Carrying credit debt is particularly common for people in their early 30s, and it is an issue that should be dealt with sooner rather than later if at all possible. Creating a budget is a good first step, as it can highlight where money is being spent and in what quantities. This allows for an individual or family to create a plan to cut spending where necessary in order to start chipping away at debt. 

Paying down credit debt before Chapter 7

Debt is one of the most ubiquitous financial challenges facing consumers every day. Here in Kentucky and elsewhere in the nation, credit card debt has reached an all-time high, with residents facing the consequences of high interest payments and sometimes even debt collection. However, there are multiple ways to cut down on debt, from consolidation to budgeting to a Chapter 7 bankruptcy filing. 

The first step in any debt repayment is to come up with a budgeting plan. The nature of this budget should take into consideration where overspending is occurring, and steps must be taken to curb this trend. For some people, this means limiting money spent on impulse shopping or frequent nights out. For others, lowering debt could require a considerably more involved plan. 

Chapter 7 just one way to handle debt

For many Americans, debt is an unfortunate reality of day-to-day life. Here in Kentucky and elsewhere in the nation, credit card debt levels have soared over the $1 trillion mark, leaving many families in financial hot water. Thankfully, a number of strategies exist to help individuals mitigate debt. For those who struggle with large sums of debt, Chapter 7 bankruptcy remains an option as well. 

Some financial advisers stress the importance of monthly budgeting as part of a healthy financial lifestyle. One such budgeting strategy is referred to as "zero sum budgeting," wherein the individual plans out the use for every dollar earned in a month ahead of time, in order to avoid frivolous spending. Of course, many other budgeting strategies exist, but the thrust of all of them is to account for money spent and avoid putting charges on a credit card that can't immediately be paid off.

Consolidating credit debt ahead of Chapter 7

With Americans cresting over $1 trillion in credit card debt as of this year, it is unsurprising that debt is one of the most stressful elements of day-to-day life for many households. Here in Kentucky and elsewhere, families struggle to overcome high levels of unsecured debt. Several options exist for them to be able to escape the specter of debt, including consolidation and even Chapter 7 bankruptcy. 

Many financial advisers agree that debt consolidation is one of the most effective ways of handling out-of-control debt. Consolidation can mean several things, one of which is the act of taking out a personal loan and consolidating all credit card balances onto the single loan. This has the dual benefit of taking advantage of a lower overall interest rate, and paying down all bills in the same location. 

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