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Free yourself from consumer debt

Washington residents aren't alone in their struggles with credit card debt. On average, the typical credit card balance for Americans is more than $15,000. However, many consumers are bowed under much higher debts on their plastic and seeking ways to get out from under the debt mountain.

The problem with pulling out the plastic every time you make a purchase is that many consumers fail to pay off their balances in full each billing cycle. If the balance is not paid, interest is added, and the annual percentage rate is charged and added to the debt. Unless that balance is zeroed out every month, it doesn't take long to get into a big mess with credit card debt that can follow you around for years to come.

There are ways to bring down your debt, however. Two are lowering the outstanding debt amount and lowering the rate of interest charged. The first method simply means that more of your money must be allocated each month to paying down your debt. One of the easiest ways to do this is to set up automatic payments to your credit cards from your checking account each payday. The premise is if you don't have access to the money, it's impossible to spend it.

Another way to pay down debt is to take on some part-time or temporary work until your debt is paid off. Then make sure that all of these earnings are earmarked only for your debts.

Make sure that you are paying off the debts with the highest interest rates first for the best return on your money. This gets us to the second method, which involves lowering the interest rate and is useful if you qualify for a zero percent balance transfer credit card.

Most offers come with an introductory grace period of six to 18 months interest-free, giving you ample time to make a serious dent in your debt mountain. There may be a negligible one-time balance transfer fee of about three percent, however.

Opening a home equity-backed line of credit so that you can pay off unsecured debt can be another option. But this can be risky because if you fail to keep up with this debt, you could lose your home.

If you are in over your head, it may be time to consult with a Washington bankruptcy law attorney. He or she can review your options to wipe the slate clean and start anew.

Source: NerdWallet, "Dealing with credit card debt: How to get debt free" Anisha Sekar, Dec. 12, 2014

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