Incomes Growing Faster than Debt in US
For many consumers, the invention of the credit card was a godsend. Whether the purchase was compulsory or necessary, consumers were able to use a simple plastic card to make that bargain with little hassle. In the modern era, that simplicity makes it easy to overspend, if you’re not thinking about it.
Traditionally, banks present credit cards as a means of emergency funding. As soon as an individual opens a bank account, credit card companies and bank employees alike will recommend getting a credit card in the case there’s an unexpected expense. Still, using your credit card in a disaster may be riskier than you might imagine, leaving you unable to pay off the debt among other consequences. This article lists a few of the reasons why it is better to have a savings account for emergencies than to use your credit card.
Steep Interest Rates
When you’re able to buy practically anything you want with using plastic, spending can seem easy. The bill doesn’t come until later, so it’s simple to stave off the worry about actually paying off your credit card for a few weeks. That’s some dangerous thinking, however. Depending on how much you spent, you’re likely facing a bill that’s too expensive for you to pay off with one payment. When that occurs, you start paying installments. Those payment plans, unfortunately, have interest added to them.
Instead of buying the product or service at their base rate, you’re paying more for it in the long-run. You should think of a credit card as a loan. All loans come with interest rates, and sometimes, those rates can be quite high. You may find it more and more difficult to pay off those accounts as prices climb.
Adding to Your Debt
Every time you use your credit card, you’re adding debt to your name. Again, credit is considered a loan. You’re borrowing money from a financial institution to pay for that emergency. If you’re unable to pay it back when the bill is due, then you’re going to be stacking deficit upon deficit. You might end up digging yourself into a hole without even realizing it. This is especially true if you wind up having more than one emergency at a given time or spread payments across several credit cards. After all, you can’t predict what you’ll need in a moment of crisis.
Poor Planning
While saying that credit cards make you lazy is an overstatement, it does often make you feel like you need to don’t need plan ahead financially. With that mentality, you’ll never create a serious emergency savings fund. Unfortunately, most cases of severe debt happen because individuals rely on their credit limits too much and end up unable to pay off their monthly minimums. By that logic, you shouldn’t use your card unless you have the cash-on-hand to procure what you need.
Consider a Credit Card Debt Relief Lawyer for Assistance
If you’re already in too much debt from credit card purchases, you might be considering filing for bankruptcy, but declaring bankruptcy is a drastic measure that you should avoid at all costs. Often, an experienced attorney can help you eliminate debt without bankruptcy and negotiate with your credit card companies to keep them from pressing charges.
The Illinois credit card debt attorneys at Benveniste Law Offices can help you figure out what to do in your unique position. With over seven years of experience as a debt collection attorney, Heather Benveniste understands how debt collection companies operate and can use her insight to your benefit. Everything is case by case, so reach out to us personally to learn more about what can be done to rectify your financial circumstance. Call 1-800-497-5358 today for your free case evaluation.
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