These days, almost anything can be purchased online. Most online retailers also allow consumers to save credit card information, making it incredibly easy to overspend. It doesn’t take much for credit card debt to spiral out of control. Here are a few tips to help Michigan residents control credit card spending and avoid bankruptcy.
Create a budget
Making a budget will help individuals understand how much they are bringing in versus how much they are spending. By having a monthly budget, consumers can identify key areas where they can cut back on spending. Also, a budget can show individuals how much they can allocate to savings.
Pay off the balance each month
If possible, pay off the total balance each month. Paying the total balance each month will ensure account owners don’t accrue interest, which only prolongs and adds to the debt. Paying as much as possible on the balance will also allow account owners to take advantage of rewards that many credit card companies offer.
Keep a low debt-to-credit ratio
The debt-to-credit ratio is sometimes called the credit utilization rate. Basically, the debt-to-credit ratio is how much available credit a consumer is using versus the total amount they have available. A high debt-to-credit ratio can make it very difficult to dig out of debt. When consumers max out credit accounts, they often rack up interest charges faster than they can pay the balances off.
If debt becomes overwhelming and there is no way to pay it off, bankruptcy is a viable option. Chapter 7 bankruptcy can discharge most unsecured debts, like credit card debt. Those in Michigan who want to know more about bankruptcy can get help by speaking with an experienced legal professional who can examine a person’s specific situation and provide invaluable guidance.
