Are you paying off your credit cards the right way?

March 26, 2018 Posted by kingcade

If you have multiple credit cards you are making payments toward, paying off the cards in the right order can make all the difference in how quickly you get out of debt. Turns out most consumers are using a repayment strategy that takes longer and costs more than it has to.

Here are some quick tips to help you tackle credit card debt the right way:

Go above the minimum.  When you receive your credit card statement, it will include the minimum monthly payment you are required to make.  This is typically 2 to 5 percent of your entire balance.  Paying only the minimum will have you avoid late fees and keep you from being reported to the credit agencies, but that is about it.  Depending on the interest rate of your credit cards, paying only the minimum could keep you in debt for 30+ years!

Avoid balance-matching.   According to a recent study, many consumers are allocating their credit card payments in proportion to the balances on each account.  For example, bigger payments are going towards cards with bigger balances, while smaller payments are going towards cards with smaller balances, also known as “balance-matching.”  The problem with this strategy is it avoids the interest rate entirely, which is a determining factor in how long it will take you to pay off the debt.

Utilize the debt avalanche method.  This is the optimal payment method and requires making additional payments to your highest-interest cards, first while making only the minimum payments to your lower interest credit cards.  Once your highest-interest credit card is paid off, move to the next highest-interest card, and so on, until your debt is eliminated.  This debt elimination strategy ignores the balances and uses only the interest rate to determine how to allocate payments.

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If you have any questions on this topic or are struggling with out of control credit card debt, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at

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