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PLEASE NOTE: To protect your safety in response to the threats of COVID-19, we are offering our clients the ability to meet with us in person, via telephone or through video conferencing. Please call our office to discuss your options.

We help clients throughout Northern California overcome their legal challenges and move forward with their lives.

Our inside knowledge gives clients the edge they need to defend themselves against criminal charges.

At Bird & Van Dyke, we help clients put the pieces back together after being injured in an accident.

Contact us at 209-390-8877  to schedule a free consultation.

LOCAL ATTORNEYS, LOCAL REPRESENTATION

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Extra cash may be used to pay off California credit card debt

| Dec 18, 2013 | Credit Card Debt, Firm News |

In some situations, it can be generally easy to get caught up with low introductory rates on credit cards. However, after the introductory period is over, many California consumers are stuck with high interest rates that lead to credit card debt. Consumers who have a considerable amount of their income left over can benefit from using the extra cash to pay down their credit cards.

In one such situation recently reported, a consumer has a mortgage balance of almost $100,000 with a 4.25 percent interest rate. The consumer also has a home equity line of credit of $25,000 and has in excess of $1,500 per month left over after paying all of their expenses. The consumer has been putting the extra cash into paying down the mortgage, but has over $20,000 in credit card debt on a zero percent introductory rate, which is scheduled to come to an end.

Due to the consumer having a home equity line of credit, it may be tempting to use that to pay down the credit card accounts. It’s best to avoid that route since the consumer would likely end up drowning in more debt by using the home equity as an alternative means of payment. The consumer can increase their chances of paying off the credit cards by taking the extra cash and putting it toward credit card payments. To prioritize the cards, it would be best to start with the first card that is scheduled for the introductory rate to end, then work along to the other cards.

If this consumer consistently pays $1,500 per month, then it will take just over a year to have the credit card debt completely paid off. If the debt is still too much to handle, debt consolidation or bankruptcy may be suitable options. Proper knowledge of bankruptcy laws can help California consumers reach the best financial decision.

Source: Fox Business, Manage Ballooning Credit Card Debt, Don Taylor, Dec. 11, 2013

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