For many Tennessee consumers, credit card debt is something that sneaks up on them. They may go for many months - or even years - paying only the minimum payments while continuing to use their credit cards for everyday purchases. Before long, they end up owing tens of thousands of dollars. This is an all-too-common situation, but by knowing the signs to look for, consumers can nip credit card debt in the bud before it gets out of control.
When the credit card bill starts to become a surprise every month, it's time to buckle down. Consumers should have a good idea of how much they are charging on their cards every month. If they are adding hundreds of even thousands of dollars each month, while making a $50 monthly payment, debt will quickly rise.
Credit card statements show how much a person would need to pay each month in order to pay off debt in three years. If that number seems out of reach, then it might be time to meet with a credit counselor. A financial expert can help with creating a budget and managing debt in order to avoid the biggest step - bankruptcy.
Some consumers shuffle debt around in order to pay less in interest. Transferring balances means having to pay fees, plus it means opening up a new line of credit, which can hurt one's credit score. Another thing to consider: if the balance isn't paid off by the expiration date, then the consumer is charged the regular interest rate, which may be higher than he or she was paying before, so it may cost more in the long run.
It takes a lot of willpower to manage credit card debt. It involves making lifestyle changes and saving every penny to put toward debt. But the reward is financial freedom and a new outlook when it comes to money. However, not all credit card debt is manageable and for those who are unable to make the necessary changes to cut their debt, it may be possible to file for bankruptcy and eliminate this debt, thus beginning the journey to financial freedom.
Source: Credit.com, "4 Signs Your Credit Card Debt Is Getting Out of Control," Christine DiGangi, May 27, 2015