Credit card debt issues are so common that many people find themselves in debt for similar reasons. One can highlight everything from loose spending to poorly monitoring finances as reasons for credit card debt, but that has not stopped people from opening credit cards. As of 2017, Americans have the highest credit card debt in the country’s history, totaling at $1.021 trillion. To discover how to fix this issue, one must first identify the source of it. Here are the top three causes of credit card debt.
The issue of overspending is probably the most common among credit card holders. In traditional consumer transactions, you pay the individual or entity with funds you currently possess for the service or product. With purchases made using credit, consumers lose nothing at the point of sale; at most, responsible spenders may make a mental note to pay more on the bill that month.
When the financial losses are not immediate, it is easier to spend more than you can afford to. This is why individuals often find themselves maintaining balances on their credit account for much longer than expected.
Major Life Change
The phrase “life happens” isn’t just an adage — it represents those times when major life changes occur for which one may not be able to plan. Maybe a natural disaster hits, you make a big move, or even get married; you’ll need money to make it through these times.
Those who do not have the immediate funds necessary to afford the related expenses often turn to credit for assistance. Sometimes this means using existing credit cards or even opening new accounts. Doing so without assessing the potential long-term issues can be potentially damaging to your credit and prevent you from opening credit accounts or securing loans in the future.
Making late payments is the easiest way to intensify debt while stuffing the bank’s pockets with extra funds from fees and charges. Late fees on credit cards generally begin at $25 for the initial late payment and then increase to $35 for every following one. Combine late fees with regularly making minimum payments, and you have yourself a recipe for longstanding debt issues. Although it may seem unavoidable at times, by setting up automatic withdrawals or personal reminders, you can help keep track of payment due dates and avoid inconvenient late fees.
If your debt issues have progressed from a few missed payments to you being sued by creditors, don’t hesitate to acquire legal representation. Heather Benveniste with Benveniste Law Offices can help negotiate your debt with creditors and resolve issues on the most favorable terms to you. Heather understands that your credit card debt may be disrupting your ability to obtain a home loan or purchase a vehicle. Let her work for you! Contact us at 1-800-497-5358 for a free case evaluation.