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Balances on credit cards can cause overwhelming debt in Texas

The problem with having debt on a credit card is that it accumulates interest as long as a balance remains on the account. If a person is only able to afford making the minimum monthly payment, he or she can end up incurring large amounts of interest charges overtime. Many times, this can result in problems with overwhelming debt for consumers in Texas or in any other state.

For example, if a person currently holds $7,500 of debt on a credit card account at a 15.99 percent interest rate, it may take as long as 32 years to pay off and can result in $13,500 worth of interest charges. It would be beneficial for this person to try to make bigger payments, which can help pay off the debt faster and result in less interest charges. However, if a person is having difficulty earning extra money due to the aftereffects of the recent recession, one may find him or herself in a difficult situation.

Luckily, there are several options available for somebody facing this type of debt problem. The person could move the debt from the current credit card account to a new credit card with a zero percent interest rate. Many credit card companies will offer no interest rate charges for a specified period of time, usually for six months. However, this may not work for some people who do not have good enough credit scores to obtain a new credit card.

In this case, many consumers in Texas decide to file a personal bankruptcy in order to obtain relief from overwhelming debt from credit cards. Most will choose to file a Chapter 7 bankruptcy since this type of bankruptcy allows unsecured debts, including credit card debt, to be discharged. This can help a person obtain a new financial start.

Source: Fox Business, "How Do I Pay Off $7,500 in Credit Card Debt?", Janna Herron, April 17, 2014

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