Could New Credit Card Help Chicago Consumers Keep Spending In Check?

Most credit cards are designed to keep you in debt. But what if they could help you lower debt instead?

That's what TD Bank says it's doing with a new credit card that offers a reward for paying more than the monthly minimum. It makes sense - at least in theory. Typical rewards cards give discounts for airline miles or shopping, encouraging consumers to spend more money, say Chicago bankruptcy attorneys. But if you're drowning in debt, you should be spending less, not more.

Here's how the card works. The normal APR is 21.24%. But if you pay at least 10 percent of your balance one month, your interest is slashed by 50 percent the next month. Pay more than 5 percent of your balance, and your discount drops to 25 percent - still better than nothing.

On the one hand, the cards create an incentive to pay more than the minimum. Not only will increasing your payment get you that discount, but you'll also end up getting out of debt quicker in the long run. On the other hand, paying just 5 or 10 percent of your balance each month still makes for a long road out of debt.

If your debt is currently out of control, transferring your balance to a better card might not be enough. Don't wait until you're unable to afford the mortgage or utilities bill. Bankruptcy can eliminate or discharge debts before you run into trouble - or before you make your current troubles worse. Curious whether a bankruptcy plan could help your finances recover? Consider giving our free personal debt analysis a try. A Chicago bankruptcy attorney will examine your finances and help you determine your best course of action. Because the best rewards program is the one that makes your life easier.

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