Many Tennessee residents have high amounts of credit card debt. In fact, among U.S. households, the typical credit card debt is about $5,700, and the average age of those with the highest amount of credit card debt are those between the ages of 45 and 54, according to a report by ValuePenguin. While credit cards can be helpful to pay for unexpected needs, they can cause serious long-term problems for people.
One negative impact credit card debt has on users is it can severely constrict their income. If credit card users make only the minimum monthly payments, their balances will grow with interest, causing their debt to accumulate. When this occurs, the amount of interest could eventually equal the amount owed. In some cases, it could even exceed the original principal, which would make the entire debt too big for most users to be able to pay in one payment.
Huge credit card debts can also damage a person’s credit score. People with bad credit scores are typically unable to secure a home mortgage loan, and if they try to rent an apartment, management companies and landlords may require them to put down a large amount of money first as security, which could cause them additional financial hardship. Having uncontrolled credit card debt can stunt people’s ability to save for retirement, too. While they are spending money trying to pay off the debt, they could be investing money into an IRA or a 401(k) plan that grows over time.
Those who wish to break the cycle of their credit card debt might want to contact an experienced attorney who could offer them solutions to help them get back on track with their finances. One option might be filing for bankruptcy if things have gotten out of hand.
Source: The Huffington Post, “3 Ways Credit Card Debt Can Ruin Your Life”, Maurie Backman, May 28, 2017