Take Charge America Shares Strategies for Paying Off Credit Card Debt

Nonprofit credit counseling and debt management agency explains how
numerous approaches can lead to a debt-free life

PHOENIX–(BUSINESS WIRE)–Consumers faced with high credit card debt face another challenge, too:
picking and choosing from various techniques, strategies and “must-do”
approaches to bringing balances to zero.

“Paying off credit cards is an important step toward financial health,
but people get hung up on the right method for paying down debt,” said
Mike Sullivan, spokesperson for Take Charge America, a national
nonprofit credit counseling and debt management agency. “There are
many approaches, but the right strategy depends on an individual’s
financial habits, personality and motivation for paying balances.”

Sullivan outlines the following strategies consumers may employ to pay
off their credit cards:

• The Snowball: This method works well for consumers who are
  juggling several credit cards. They pick the smallest balance, pay it
  off as quickly as possible, and make only minimum payments on other
  credit cards. Though they may pay more interest over time, the
  snowball works well for people who need help building good financial
  habits and will be motivated by early successes.
• The Avalanche: Instead of picking the credit card with the
  smallest balance, consumers attack the debt with the highest interest
  rate first, paying only minimums on their other cards. Since the
  avalanche may feel slower than the snowball, this strategy is best for
  consumers who can stick to a long-term goal.
• The Middle: The middle is exactly as it sounds – somewhere in
  the middle of the snowball and the avalanche. This strategy does not
  prescribe how to pay off debt – consumers simply pay down balances on
  all of their cards, all at the same time. This is best for people who
  feel they need to make a dent on all of their cards, even if the
  process is slower than the snowball or less strategic than the
  avalanche.
• The Request: Consumers paying debt on high-interest cards may
  succeed in simply calling their credit card company and requesting a
  lower rate – especially if they’re longtime customers with a good
  payment history.
• The Balance-Transfer: Credit card companies flood mailboxes
  with balance-transfer offers, promising low interest rates for people
  who move old balances to a new card. While this may prove a good
  solution for consumers with high debt and high interest rates, it’s
  important to read the fine print; many balance transfer offers only
  provide a low interest rate for a few months, or charge a transfer fee
  that may offset any savings in interest.
• The Auto Payment: Once consumers determine their payoff plan,
  they should consider setting up automatic payments through their
  bank’s bill pay system or directly through the credit card’s website.

For more tips on paying down debt, visit Take
Charge America’s Financial Education Library. People who are
overwhelmed with credit card debt and are unsure which strategy is best
for their situation can contact Take Charge America for a free financial
assessment at (866) 528-0588, or set
up a credit counseling session online.

About Take Charge America, Inc.

Founded in 1987, Take Charge America, Inc. is a nonprofit agency
offering financial education and counseling services including credit
counseling, debt management, student loan counseling, housing counseling
and bankruptcy counseling. It has helped more than 1.6 million consumers
nationwide manage their personal finances and debts. To learn more,
visit www.takechargeamerica.org
or call (888) 822-9193.

Contacts

Aker Ink
Andrea Aker, 602-339-7339
andrea.aker@akerink.com