Credit card debt is a common challenge for New Jersey residents. The constant collection calls and fear as to what might happen can be overwhelming. Fortunately, there are effective strategies to get on stronger financial ground.

Understand how to eliminate credit card debt

Inexpensive and efficient ways to clear credit card debt and move forward are useful. Consolidating the debt with a personal loan can combine what is owed to make one payment per month. This can reduce interest charges. However, some people’s finances are so poor that they cannot get a loan. There might also be fees. A balance transfer credit card can serve the same function as a personal loan and has a low interest rate. However, this may also be difficult for a person whose credit score is reduced due to significant debt. Also, the APR can rise substantially once the introductory period ends.

Debt snowball and debt avalanche are other methods that could work. Debt snowball means that the card with the smallest balance will be repaid as quickly as possible followed by the next smallest balance. This can incrementally eliminate the debt, but interest will still accrue on the cards. Debt avalanche is comparable to debt snowball except the card with the highest interest rate is paid first. This can reduce interest but will likely take longer.

Bankruptcy can also be a good option

Debtors should not be intimidated by bankruptcy. For those without valuable property, a Chapter 7 bankruptcy might be preferable because it eliminates unsecured debt like credit card debt. People who have a home and want to retain it might be better off with a Chapter 13 filing. Legal advice may help debtors to make an informed decision. Consulting with attorneys experienced in personal bankruptcy is a wise first step.