Last Updated on May 22, 2023
The figures are horrifying: The average household credit card debt in the US is around $15,000, the average mortgage debt is about $147, 900, and overall consumers owe over $11 trillion in debt. Every day, millions of people use credit cards as a financial crutch. Unable to pay for their purchases, they carry their balance over month to month and dig themselves deeper into the grips of debt. The biggest reason people continue to spend unconsciously is because they don’t understand the dire consequences of debt. Avoid becoming one of these statistics by taking immediate action.
Accrued Interest Charges
Do you know what ‘interest’ is? When you borrow any amount of money whether it’s in the form of credit, or a bank loan, or financing, the lender will give you an interest rate. This rate is the price you pay for borrowing the money so if you don’t repay the amount in full each month you will be charged the fee as a percentage of your total. Imagine how great it would be to use the amount you pay in interest each month for substantial purchases. The key to lowering or eliminating your interest fees is to pay off the balance each month (in full) or seek a credit card company which offers a lower monthly interest rate.
Creditor Harassment
As if you weren’t stressed out enough over making payments on your credit cards, the harassing phone calls from collectors can make you lose your cool. Studies have proven that the anxiety associated with financial arrears can have serious consequences to your health.
Difficulty Acquiring Additional Credit
Racking up loads of debt is troublesome in itself. Say however, you need to purchase a car and need additional credit. Before a lender agrees to advance you money, they’ll take a look at your past financial history and if they see that you have massive amounts of debt they’ll most likely decline your request.
Relationships
There’s no doubt that debt can have a negative influence on your relationships. Whether it’s friction between family members, or constant disputes with a spouse regarding money matters, debt is a definite downer. Often times, one partner’s debt will cause the other partner to hold resentment, anger, and frustration in the relationship. They may feel like they’re paying the price for the other person’s carelessness or irresponsibility. It’s important to be upfront and honest with your partner about your finances before you enter into a legally binding relationship. Secrets destroy the cohesiveness and trust within a couple, so before it grows into a deceptive lie be upfront and communicate the financial areas.
Solutions
If you’re unable to handle your current financial situation, it may be time to speak to some professionals. Consolidation is one solution that many people overlook. Consolidated Credit is a trusted organisation which provides customers with counselling, management, and around the clock service to get back on the right track.
Although debt is a small word, it packs a big punch. Harvesting debt can put a strain on your relationships, lead to serious health issues, and prevent you from gaining credit for future purchases. Take control of your future today by organising your budgets and reducing your debt.
