The confidence of a consumer is debatable every time they bet their chances, on heavy credit card spending. When the debt load gets too high, it is not obvious and the consumers should be wary of the credit cards that are known to be conducive. It is estimated that Americans have more than $4.2 trillion in outstanding debt, with credit card debt accounting for more than 25% of that amount, according to the Federal Reserve.
As a consumer who is thinking of opting for a credit card or already has one, it is advisable not to prejudice its usefulness and take it with a pinch of salt.
Here are some ways to know how your credit card spending is through the roof:
1. Credit card for your basic needs, seriously?
Using your credit cards for shopping daily items like food, gas, utility bills, and clothing is a sign of financial risk. Don’t forget that looking after the expenses of your everyday needs refer to getting the funds ready for the repayment else you will end up paying more than what was borrowed initially. Planning a monthly budget or using a payment app service for your bills is the right option.
2. Transferring balances to steer clear of credit card payments
Balance transfers can be detrimental when you end up using expensive credit cards. Remember, a balance transfer fee is added onto your balance each time you transfer a balance, eventually increasing the total amount due. Repeat balance transfers coupled with oversight in keeping a check on these becomes a costly affair as you continuously add a fee to your balance.
3. Skipping one to pay for another
Life isn’t about prioritizing credit card payments, there is more to do than just investing your time and energy in the whirlpool of debt payments. Times have changed, chaos and uncertainties have become a part of our life. The only problem is nobody knows when they strike. Time and again if you are strapped for cash to make credit card payments, you’re already in credit card trouble. Multiple skipped payments will harm your credit and leave you in the lurch with limited or no options for handling the debt.
4. Inevitable ignorance of credit card statements
Never fall for advice from people who make statements that being prepared to face credit card debt can pull you out of the situation and tackle it before things get out of control. They are false beliefs because debts due to credit cards affect an individual psychologically and that’s the time one loses a track of his financial proceedings and starts pretending that nothing exists allowing his interest fees to keep growing consistently.
5. The Recurring syndrome
No rocket science here! The whole world knows that your credit card debt is always increasing. Your balance doesn’t stand a chance to come down because you have committed to accumulating debt. The borrowing habit grows in your mind as the financial needs pile up and an unexpected event like a pandemic, market crash, an economic downturn can disrupt your normal well-being. The outcome becomes too predictable and unbearable while you desperately start looking for other ways to get out of the mess. The challenge becomes tougher since you need to balance between meeting your daily ends and overcoming the credit card debts.
Remember, staying away from credit card purchases can only save you from additional debts and not the entirety of the debts. Always make it a point to look into the drawbacks of borrowing money and understand it thoroughly to prevent the financial burden in the future.