Credit cards can be powerful financial tools when individuals in Tennessee use them properly. However, they can be debt traps for those who use them too frequently. One of the allures of a credit card is that it allows a person to spend more than he or she makes in a given pay period. Ideally, those who use credit cards won’t charge more than they receive from an employer or other source.

Many people make the mistake of only paying the minimum payment each month. This can be problematic because it can take several years to repay a balance doing this. The smarter strategy is to pay down a balance as much as possible each month. It is important to remember that credit card rewards are generally not a good reason to spend more than a person can afford to repay each month.

In most cases, the interest rate on the card is more than the value of the rewards points or other perks. To keep credit card use to a minimum, it can be a good idea to create an emergency fund. Doing so can prevent one from charging hundreds or thousands of dollars to a card with a high interest rate. If possible, put the money on a card that charges no interest.

Those who seek debt relief may be able to find it by filing for Chapter 13 bankruptcy. Taking this step may prevent a creditor from repossessing a home or car for nonpayment of a secured debt. Unsecured debts like credit card or medical bills can be discharged at the end of a repayment period. The length of that repayment period may be based on a person’s income as well as other relevant factors.