Many consumers who are focusing on credit card debt repayment often make the mistake of opting for either making minimum payments on all of their debts, which could increase their overall costs when all is said and done, or there are some consumers who may focus the majority of their payments, meaning they make more than the minimum requirement, on the wrong sources of debt. This issue has been brought up multiple times over the past months and in all honesty it is a topic that many debt relief advisers have debated over the years. Yet, what it may come down to is an individual’s decision as to what types of debt they focus their payments on and how they achieve the debt relief that is necessary to alleviate financial burdens that may be in place as a result of credit card use.
The type of debt relief practices and repayment plans that are being focused on at the present time usually center around two methods that consumers use when paying off their cards. In one category, cardholders will focus their money on a credit card or the credit cards they have with the highest interest rates while meeting minimum monthly payments on cards that may have a lower rate. Yet, some consumers do the opposite in that they will focus as much money as they can to pay down credit cards that have the smallest principal amount even if that particular card has a higher interest rate.
The rationale behind each method can easily be seen due to the fact that consumers who pay down a smaller principal amount will, obviously, be in a position where they can likely do so in a shorter period of time, but there are still arguments to be made for paying off high interest credit card debts first since these balances that may be carried could offset any savings that a consumer sees by erasing debts with the smallest principle. While there are some advisers who say that this is simply a personal choice, there are those who fall onto one side or the other of the debate and often suggest that consumers calculate the overall costs for their particular situation that may arise if they use one method or another.
There are some men and women who are in a position where they may have either seen financial setbacks, which has led to a situation where they can only make minimum monthly payments but if consumers are in a position to pay a little extra on their credit card debts it can go a long way in helping them erase what they owe faster. Yet again, this comes back to the point of should a consumer pay off these smaller principal amounts first, so that they can have more money to focus on larger principle amounts and give little concern to interest rate payments, or should consumers pay off high interest debt so that they may be able to save more over the long run.
While the decision will be a personal one that a consumer must make related to their credit card situation, many consumers have hoped that cardholders would take notice of these options and begin the process of seeing which one might be best for their situation, as some consumers who may change their credit card debt repayment strategies might find that they are able to erase their debts much faster and at a lower overall cost as well.