Everyone knows that credit card debt is bad. Nevertheless, they still get into debt trouble again and again. In fact, some people have had to file for bankruptcy multiple times in order to resolve debt troubles that they had no way of getting out of.
For these reasons, it’s important for everyone to review exactly why credit card debt is so awful. Here are three reasons why you should never hold any kind of credit card debt:
- Credit cards come with high interest rates: Many credit cards are costing you upwards of 20 percent annually on your balances. This is a massive amount of money, and if it takes you years to pay off your debt, you could be paying double or triple — or more — of the amount you originally put on the card. You might have thought you got a good deal on the new television you bought with the card, but when you consider that you will likely pay triple that amount after years of paying off your card, it’s not such a good deal anymore.
- It takes too long to pay off: Your minimum payments might not look like a lot of money — and that might be a good thing for your finances at the moment — but if you hope to ever get out of debt fast, you’ll need to pay a lot more money each month to pay down your credit card bills.
- You’re not making money off your purchases: If credit cards were used to buy items that increased in value, like a home or a piece of real estate, that would be one thing, but most people use their cards to buy consumable items that don’t bring them any extra monetary benefit.
Are you struggling to pay off your credit card? You might want to learn about your eligibility for bankruptcy and other debt resolution strategies.