How credit cards can lead to bankruptcy It is not a secret that bankruptcy is on the rise in America. The cause of these bankruptcy cases is predominantly due to credit card debt. Consumers are constantly spending more money than they earn.
It is becoming a Nation-wide epidemic and the only way to get out of it is to get educated about it and make changes in day to day spending habits. The convenience of using plastic is evident, but at what cost? Yes, the fact that you can swipe a card and buy fast food and gasoline saves time and is easier than pulling out cash or writing a check. But what is the true expense of this? A consumer's financial well-being is at stake.
How is it at stake? According to bankrate.com, the average American household carries approx. $10K in debt. Did you know that if you only pay minimum payments that it will take you 382 MONTHS to pay off and you will have spent $14,600.00 in interest alone to these credit card companies? Not a good way to spend your hard earned money. A few factors contributing to credit card bankruptcy is that, when a purchase is made through a card the individual pays the minimum amount that has to be paid monthly and not the exact amount.
Bankruptcy is more common with people who use more than 1 credit card. People who use more than 1 card often indulge in wild shopping frenzies and overshoot their credit limits on each of the cards within a short time. People in debt can use the following tips to save themselves some more time; paying more than the minimum balance amount to be paid monthly, moving balances from cards with high interest rates to those with low interest rates.
There are several ways by which a person can get out of credit card debt, but it's always advisable to stay safe and not get into such a situation. If you are already in too deep and need debt counseling, get it now. Do not delay thinking things will change. It will get worse. Debt Management companies can help you get out of debt quicker and can most times save you from bankruptcy and the devastating effects it can have on families and individuals alike.
Sandra Baughman, has been an expert in the financial industry for over 10 years Debt Management. If you would like further information regarding Debt Management and/or Debt Settlement, please visit Debt Settlement here.