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How much is your credit card debt really costing you?

Like many others in Tennessee, you may rely on your credit cards for daily purchases. From buying groceries to paying medical bills, you may simply swipe your card or give your card number without giving it a second thought. However, the ease of using cards can quickly become secondary when the balances you owe become more than you can manage on your own.

Each purchase made with a card comes with a price. With the high interest rates that often come with credit cards, you may be paying more than you bargained for. Over time, accumulating interest and high balances can leave in a precarious financial situation. At this point, you may want to consider the debt relief options available to you.

The unexpected consequences of credit card use

Statistics indicate that most cardholders have balances around $6,200. If they can only afford the minimum payment or they don't pay off the full amount each month, the rest will rollover to the next month's bill. This cycle continues indefinitely, with more interest added on over time. The average interest rate for credit cards is 14.87%, but with some cards, the rate is as high as 18%. This can leave some consumers with high balances and no way to pay it off.

Interest is essentially the money that a consumer pays to the credit card company for having a card. If you are able to pay your balance off each month, you will pay little to no interest. However, most people are not able or not willing to do this. In fact, many people with credit cards pay around $1,000 each year in interest. This means most consumers end up with $1,000 less for retirement savings, emergency funds or even simply paying their balances off.

You have options

If you have too much credit card debt and not enough money each month to make a dent in what you owe, you are not alone. Credit card debt can accumulate for many reasons, and sometimes, these reasons are beyond your control. Thankfully, you don't have to stay in this cycle forever.

It may be reasonable to consider the benefits of consumer bankruptcy. While this may not be your first choice, it can allow you the opportunity to deal with certain types of unsecured debt once and for all, including credit card debt. If you want to know more about how this works and what you should do, it may help to speak with an experienced attorney about your situation.

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