Priority Plus Financial Explains Why Credit Card Debt Doesn't Seem to Ever Get Paid Off
One of the biggest challenges of today always has something to do with paying off debt. Credit card debt, to be precise.
As of 2022, Americans have a total of $841 billion on their credit cards and the average American credit card debt is at $5221. That is a huge amount and everyone is right to worry because the pandemic is far from over and people in the United States are bound to keep using their credit cards as a way to survive the recession due to shortage of business and employment opportunities.
For those who have started their journey towards getting out of credit card debt, most are still struggling to get it all cleared. Priority Plus Financial understand the pain of going through credit card debt; it’s never easy and, while it feels like one is making improvements, the harsh reality will keep coming back every time the monthly statement from the credit card company arrives.
So why is it that credit card debts are a pain to get paid off? The answer to this question relies on four simple truths:
The debtor is still using credit cards
Because credit cards are so easy to use, there is always the possibility of using these little plastic cards for spending on essential goods. To actually see an improvement with credit card debt, one has to stop using credit cards. When shopping for necessities, such as food and groceries, don’t use your credit card. One can use a debit card or a credit card that has a controlled limit. This way, there is a limitation to what one can spend on during grocery shopping. Also, one must learn to control online shopping, since this is one of the main reasons why credit cards are a popular payment system during this pandemic era.
The payments made barely cover the interest rate
When it comes to borrowing money, the most important part of it all is the interest. That is how your credit card company is making money every time you make payments for your credit card debt. Each monthly debt payments cover a certain amount of interest and a certain amount of principle. Thus, one should remember that if the payments made is only going towards the interest, then the debt balance will only go down by a small amount. The only way to get out of this situation is to either increase one’s payment amount or go for personal loans with a lower interest rate. We at Priority Plus Financials can definitely help with that!
The payments made only go towards credit card debt fees
While making fees, it is also important to check what are the fees being paid for when repaying credit card debts. Like interest rates, the fees actually keep one’s credit card balance from going down, even though several payments have already been made for finishing off the credit card debt. Late fees, credit limit fees, annual fees, and all other fees are sometimes the culprit why paying off credit card debt can be so difficult.
Paying only the minimum amount
As mentioned, while paying off debt, if the payment made is only at a minimum amount, then one will feel like paying the credit card debt for long periods of time. Not only is this going to affect one’s mental health, but physical health as well. People are forced to work overtime at all times just to pay off credit card debt.
Feel like paying credit card debts like forever? Not all hope is lost though. Priority Plus Financial are more than happy to help people trying to recover or pay off credit card debts.
Originally published at https://priorityplusfinancial.blogspot.com on July 7, 2022.
