While we can’t tell you how you should spend your divorce settlement, we will tell you this: If you’re able to pay off all of your credit card debt without putting yourself under financial duress, then you should do it.

In other words, you should have at least one month of income set aside in case of emergencies. If you’re able to maintain that small nest egg and still pay off all your credit card debt while sustaining yourself, then it’s probably a good idea to do that.

Why?

Two words: Interest rates.

If you have a balance of $10,000, an APR of 14.9%, and make only the minimum monthly payments ($250), then you’ll end up paying a whopping $9,629 in interest over a period of nearly 26 years.

That’s a lot of money going down the drain. And a lot of time spent on paying off debt.

An Alternative Solution

If your divorce settlement doesn’t cover all of your credit card debt—or you don’t want to risk spending it—and you’re only able to make the minimum payments each month, then you might want to consider enrolling in a Debt Management Program.

On average, our Debt Management Program at DebtHelper.com helps our clients to reduce their interest rates down to 1.9%, reduce their monthly payments by more than $300, and pay off their debt much faster.

Want to find out more about how our Debt Management Program works?

Fill out the form on the right for a free, 100% confidential Debt & Divorce Counseling Session and one of our Certified Credit Counselors will come up with a personalized and affordable plan to get you on the road to being debt-free.

Client Success Story