|
3 mistakes consumers make when it comes to credit card debt
Credit card debt can drive anyone to the point of insanity, especially when the principal balances owed never tend to move. With Americans relying so heavily on credit card debt, many consumers make the mistake of getting the credit cards to begin with. Although a credit consolidation program can help consumers battle the debt, it's good to avoid the debt first to begin with. The purpose of our company is to bring consumers to a better state of financial understanding. Credit card debt is one of the worst types of debts to have, and in short, we’ll explain 3 common mistakes that consumers make when it comes to this form of debt.
- Getting caught up with the introductory deals
From the statistics obtained through recent polls, many consumers initially obtain credit card debt through the offers of introductory offers. Whether it be the holidays or merely walking into a store, these places tend to have flashy signs or provide US mail offering introductory rate offers. Statements such as zero payments for 6 months, or zero percent interest rates for the first year will make even the most stubborn person give in. It’s important for consumers to avoid these introductory offers as it tends to give the consumers the false sense of having money that never existed (that’s what credit card debt does). When the introductory offers are intact, consumers spend frivolously which leads us to our next mistake.
- Assuming that all is well when the balances increase
As time goes by, consumers tend to think that all is well because they have an introductory offer on whatever loan or credit card it was they got. You would think and it’s only natural, that if a consumer spent a thousand dollars on this new form of credit in one month, they wont pay a thousand dollars for a minimum payment when the billing cycle is up for that month. With the birth of a new month, that consumer will probably continue to use the card until the card cannot be used no more due to the credit limit. It’s a proven fact that more than 90% of consumers come within the allowed 10% credit limit in the first 30 days of getting that card, sad isn’t it? But hey, the interest rate is still introductory and probably zero percent which makes it ok. This leads us to our third mistake which we will outline below.
- Stuck making minimum payments indefinitely (checkmate)
As the title says, checkmate. When that consumer was too busy maxing out the credit card for those several months, the introductory period is now over. That consumer is now stuck making a minimum payment of let’s say 2% (if $10k is owed, expect $200 for a minimum payment); only to see that 50-75% of the payment is going towards finance charges and interest. Remember, after the introductory period is over the interest rates are usually put in the mid-teens only to increase in the high 20s for any reason or no reason at all. Consumers will make this payment and hope that the balances will go down, but rest assured, they will not. Because of this and since so many people were filing bankruptcy, the birth of credit card consolidation through debt management or debt settlement offers is the ideal choice for debt relief.
If you've found our article helpful, please show your appreciation by clicking the Google +1 button or by liking us on facebook or twitter.
Contact us for a free consultation, we can get you quoted in literally minutes.
|
