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Consumers would use extra cash to pay off credit card debt

What could someone do with an unexpected, tax-free windfall of $10,000 in cash? One might expect the answer to be different across all age groups in Florida and elsewhere around the nation. However, a recent survey revealed that the most common answer for all generations was to pay down debt, particularly credit card debt.

The survey, conducted by an online lending company, showed that burgeoning credit card balances are a major concern for people across the board. Experts acknowledge that, once a consumer has a balance, it becomes increasingly harder and harder to eliminate it. This results in potential financial problems down the road.

With credit card debt topping $1 trillion, it is becoming a concern to many families in the United States. Every person has an average balance of nearly $6,400 on credit cards, an increase of 3 percent since last year. As the balances have risen, so have the interest rates on those balances. The Federal Reserve recently raised interest rates and is expected to increase them again in 2018.

Experts suggest tackling credit card debt in several ways. It can be helpful to transfer balances to a 0 percent card. Selecting a repayment method is critical to a plan's success. Many believe it is best to pay off the card with the highest interest rate first, then once it's paid off, put that payment amount toward another card. Once debt is at a manageable level, consumers must avoid getting back into the habit of frequently incurring debt on their cards.

Credit card debt may feel insurmountable to many Florida residents. A knowledgeable bankruptcy attorney can help consumers develop a plan to reduce or eliminate their debt. A trusted lawyer will work with clients to get their finances back on the right track.

Source: cnbc.com, "Here's what people would do with a $10,000 windfall", Sarah O'Brien, April 6, 2018

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