Credit Card Debt

What to Do After Paying Off Your Credit Card Debt

Credit card debt is a source of stress for many consumers. Once a large balance is accrued, the high interest rates can make credit cards nearly impossible to pay off.  Whether you have been able to pay off your credit card debt or have had the debt discharged in bankruptcy, it is important to modify your financial behavior moving forward.   

Monitor Your Credit Score 

Consumers should monitor their credit reports on an annual basis to ensure that there are no inaccuracies. Once a credit card is paid off in full, that should reflect on the person’s credit report. Additionally, paying down a large sum of debt will have a positive effect on the consumer’s credit score. As the person’s credit score goes up, his or her chances of being approved for financing in the future also improves. After paying off debt, the consumer should check his or her credit report to ensure that this payment is reflected on his or her score. To make sure that the consumer’s credit score improves, periodic monitoring of his or her credit report should also occur.  

Create an Emergency Fund 

After the debt is paid off, the consumer should take the money that was going towards that debt and put it in an emergency savings account. Financial experts recommend that consumers have at least three to six months of expenses saved in an emergency fund. Even if the consumer is only able to put away a little at a time, through consistent savings, a proper emergency fund should soon be created.  

Conquer Other Debt 

Once the consumer pays down his or her credit card debt, the money that was going towards that payment can then be funneled towards paying off other debt, as well. Eventually, the goal for any consumer should be to eliminate all of his or her debt, if possible. Through the snowball method, the consumer can focus that money on paying off other unsecured debt, including personal loans or medical debt. If the consumer has no other unsecured debt, that extra money can also go towards paying down the consumer’s car loans or even paying down an outstanding mortgage. One way to do this is to take that extra payment and put it towards the mortgage principal mid-month. Over time, this extra payment can make a substantial effect on the individual’s mortgage debt.  


The money that was going towards the consumer’s debts can also be put into an investment account so that the money grows and is available to the consumer for retirement. Many times, in lieu of putting money into a savings account, financial experts recommend that a portion of this money be put into an account that has the potential to grow more than it would with the low interest rate of a savings account.  

Avoid Past Spending Habits 

The worst mistake a consumer can make after paying down credit card debt is to continue the spending habits that put him or her in the situation initially. Once that debt is eliminated, the last thing the consumer should do is put debt back on that same credit card. Keeping the card out of the person’s wallet is one way to keep it out of site and out of mind. Additionally, the consumer should prepare a budget to plan out how much money is available to the consumer for expenses.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, 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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