Credit habits may prompt a need for bankruptcy

No two Tennessee households handle their finances in exactly the same way. Some people love budgeting and are diligent and particular about the records they keep, as well as their spending habits. Others have credit card issues that, if left unresolved, may lead to serious financial crises that prompt a need for debt relief, such as filing for bankruptcy.

Credit issues that should cause concern

It is not uncommon for people to fall into bad credit card habits from time to time. The following list, however, includes issues that can wind up sparking a full-blown financial crisisif left unresolved for too long:

  • Failing to keep track of balance statements
  • Not paying the minimum amount due or more
  • Using credit as cash
  • Buying on credit with no way to pay balance

It is understandable that someone might use a credit card to pay an unexpected bill that he or she does not have funds on hand to meet, such as medical bills that arise because of a health crisis. However, falling into the habit of using a credit card instead of cash, especially while knowing that there will not be enough funds to cover the expense before the pay cycle ends, can quickly rack up debt and lead to a financial crisis.

Closely monitor credit card statements

It might not seem that forgetting to check one’s credit card balance is a bad habit. If a person makes several expenditures — especially if those purchases involve expensive items or activities — and forgets that he or she used a credit card to make the purchase, it can create problems, such as activating high interest rates so that the person winds up paying even more for the item in the long-run.

If credit card debt gets out of hand

Credit card debt is one of the most common causes of serious financial crisis. When there does not appear to be an available option to resolve a debt, it is helpful to research financial tools such as Chapter 7 or Chapter 13 bankruptcy. There are eligibility requirements associated with both programs, so it is important to determine which type of debt relief would be the best choice for a specific person.

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