Credit cards have their advantages. They are a convenient way to get the things consumers need or want when they are short of cash. People in South Carolina may use their cards for daily expenses like groceries or eating out, or they may save their available balances for vacations or back-to-school shopping. However, consumer advocates warn that carrying too much credit card debt means risking serious financial consequences.
By making a purchase and paying it off right away, consumers can build their credit scores and perhaps earn any points or bonuses their cards offer. However, most people don’t pay off the balances each month. In fact, the average American owes about $5,700 in credit card debt. One serious drawback of carrying such a balance is that consumers could end up paying almost as much in interest as they do on the principal. Therefore, paying the minimum monthly payment on that $5,700 may cost someone about $5,000 more in interest.
Even a minimum payment on a maxed out credit card may take hundreds of dollars from a family budget each month. Additionally, carrying heavy credit card debt can damage a person’s overall credit score, making it difficult to get approval for a rental and nearly impossible to qualify for an affordable mortgage. Consumer advocates calculate that those who spend years making minimum payments on high-interest credit card debt may lose thousands of dollars they could put toward retirement.
For many in South Carolina, credit card debt becomes a trap from which they cannot get free. If one card if used to the limit, they may open another account for emergencies. Missing a payment can mean adding late fees and penalties to already spiraling debt. In those situations, the advice of an attorney may prove valuable. An attorney can provide options for debt relief that may include seeking the discharge or reorganization of debts through bankruptcy.
Source: fool.com, “3 Ways Credit Card Debt Can Ruin Your Life”, Maurie Backman, May 28, 2017
