Debt is inevitable for most families in the United States. Whether it is student loan, medical, mortgage or credit card debt, the vast majority of Americans owe a creditor in some way. Despite the many benefits of credit cards, those little plastic gems can sometimes result in an unmanageable debt situation for unsuspecting consumers.
There are various strategies to help individuals make smart decisions when applying for and using credit cards. For example, some of those tips are:
- Ignore the flashy marketing materials and focus on the fine print details of the contract
- Don't open a card just to get the sign-on bonus
- Do not open and close cards to avoid fees
- If possible, try not to bounce balances from one credit card to another
- And do not open a store credit card to get a quick discount
These are just some of the ways to help individuals look at the big picture of credit card debt.
It's also important to remember that heavy debt and delinquent payments on credit cards can have a negative impact on a person's credit rating. The lower the credit rating is, the lower the credit score, and that can make it harder for an individual to receive future loans for housing, cars and other necessities.
When debt becomes unmanageable, bankruptcy is one option for relief. Personal bankruptcy can either eliminate debt or create a reasonable payment plan, depending on the type of bankruptcy for which the consumer qualifies.
To learn more about bankruptcy and how it relates to specific kinds of debt, please stop by our Denver bankruptcy site. Our firm helps individuals get the debt relief they need.
Source: Fox Business, "Four Credit Card Strategies That Can Burn You," Jeanine Skowronski, Nov. 1, 2012