Top Six Pieces Of Info Your Mama Should Have Warned You About Credit Card Debt

What do an increasing number of people consider to be their biggest financial problem? The answer would be the large amount of credit card debt that each family is carrying. We’ve used them to carry us through the current recession but the end may take longer than we think. So here are six things you should know about while we’re waiting for the turnaround.

1. Keep paying the credit cards. Missing a payment on one account can cause the others to raise their interest rate also, even if you’ve paid them promptly for years. Sounds unfair, doesn’t it? It’s called universal default and it’s very real. A missed payment can stay on your credit report for years.

2. To make matters worse, if you miss a payment to one card all of your other cards may raise their interest rate in what they call a “universal default”. So even if you’ve paid on a card religiously, you may get hit with an increase for missing a payment on an unrelated card.

3. Credit card debt starts early. An average college graduate leaves school with over $2,000 in debt. Paying off is a tough lesson to learn just as you’re starting your adult life.

4. When you have your spending under control, you’ll need to make a commitment to yourself to spend only what you can pay back at the end of the month. Set the credit cards aside and stick to the road to becoming debt free.

5. A large amount of debt will reduce your financial options. If you have a low credit score because your credit cards are maxed-out, then you’re going to pay a higher interest rate when you want to buy something.

6. Many people have turned to credit cards to extend their budget in this recession. They use them to fill the gap and are increasingly using them to do things like buy groceries and pay the mortgage. The problem is that it may take longer than we think for the economy to turn around.

Take responsibility for your money and what you spend it on. If you’ve let yourself get in over your head then ask for help and we will find someone to lead you through the maze that is the repayment of credit card debt. Credit card balances grow when they’re not being observed so be vigilant about keeping them in check and serving you instead of being a drain on your money and your emotions. It’s your money, let’s use it to benefit ourselves and our families, not to hang over our heads like a black cloud.

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