Credit cards can be a great asset to have. When used responsibly, they can provide security against purchases, and they can also help to improve your credit score when you show that you are reliable with repayments.
Getting control of credit card debt doesn't need to be difficult
Credit card debt can arise seemingly out of nowhere. If you have several credit cards and you rely on them regularly to purchase daily items, you may start spending more than you earn. If you do not keep track of your spending and don't pay back the minimum repayments on your credit cards within the given time frame, you may end up in a cycle where you need to pay back credit card fees that you cannot afford.
Why is credit card debt such a common problem?
Credit cards are tools that are primarily designed for convenience. They are intended to only be used by those who can afford to pay them back. However, many people use credit cards as their primary payment method, and they can get into the habit of spending much more than they have the ability to pay back in a reasonable amount of time.
How can I avoid credit card debt?
When a person is struggling financially, they will likely start to depend more on credit cards to pay for their daily expenses. This can be tempting to do, but it can quickly spiral out of control, especially if the person starts to pay for non-essential items such as luxury clothing or restaurant food.
How to quickly clear credit card debt
Those with financial struggles often tend to use their credit cards when they are short on funds in their debit accounts. This can become a bad habit and could get out of control over time. If you get behind on your credit card repayment obligations, you may feel stressed about not being able to pay back your debts.
Mistakes people make with credit cards
When used like a debit card, credit cards often don't cause any problems. You just spend less than you earn and pay it off at the end of the month, rather than taking money out at the time of each purchase, as you do with a debit card. It's the same general principle.
What is the CARD Act of 2009?
The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) was made a law by the United States Congress in 2009. At the time, it aimed to reduce creditors' abusive or deceptive practices. The Consumer Financial Protection Bureau (CFPB) enforces this law.
Shopping addiction takes many forms
One of the biggest reasons for credit card debt is a shopping addiction. Someone who suffers from this disorder is compulsive and cannot help themselves. They may know they have a lot of debt and that they can't afford whatever they want, but they buy it anyway.
What is the average credit card interest rate?
The interest rate is incredibly important when choosing a credit card. If you cannot pay the balance off every month, you're going to need to pay for that loan -- which is all a credit card is, really -- and the interest rate determines how much it costs. Many people who run into problems with credit card debt get trapped in a cycle where they can only afford to pay the interest and they never make any headway on the balance.
Tips for debt prioritization
Being in debt can make even the most focused people lose their perspective. A common reaction to overwhelming debt is to avoid the problem completely and to continue spending as usual. This reaction is so common because facing the situation is painful. It's important to remember that the problem will only get worse if you ignore it. Therefore, the sooner you take control of your finances, the sooner you will feel better.
