Emergencies sometimes force people in California to use their credit cards. Reliance on credit cards has resulted in American households owing an average credit card balance of $8,195. A person with roughly $8,000 in credit card debt who only makes the minimum monthly payments would need about 23 years to pay off everything at an average interest rate of 17.41 percent.

During those decades, the debtor would pay approximately $11,000 in interest on the original balance. Minimum monthly payments take so long to reduce the debt because they only equal about 1 percent of the balance.

People need to make payments at much higher amounts to pay off debts within a couple of years and substantially reduce interest costs. The same average debt of $8,195 might be paid off by a household with a typical income in 13 months if the debtor applied 15 percent of income to the monthly bill.

People who cannot afford to direct a large percentage of income toward credit card bills would still reduce their costs a little if they at least paid more than the minimum payment. They should always strive to make the highest payment possible and look for opportunities to transfer the balance to a 0 percent interest introductory rate credit account, which would provide some temporary relief from mounting interest costs.

When a person cannot realistically get debts under control, the option of bankruptcy might resolve the financial strain. The insights of an attorney could help someone explore the potential of legally discharging credit card debts and gaining a fresh financial start. After analyzing the person’s income and debts, an attorney could explain which chapter of bankruptcy to pursue. The lawyer could complete the necessary court paperwork and manage the case as it works its way through the system.