Credit Card Debt On Your Lifestyle, Family And Future Essay

Credit Card Debt On Your Lifestyle, Family And Future Essay

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According to the Federal Reserve, the average household credit card debt as of 2012 was just over $15,000. The majority of consumers who use credit cards report carrying debt from month to month and a growing number of people are using credit cards to cover daily expenses like groceries and fuel. No matter how much you owe on credit cards, you may want to seriously consider the ramifications of debt on your lifestyle, family and future.

Don 't Lose Control

Unless you are using credit cards responsibly and paying off debt each month, you are giving up control. Carrying a balance means you will owe money in the future. As your credit card debt mounts, you give up control of some part of your future income because it will be required to make minimum payments. Some people make thousands of dollars in minimum payments every month, just paying enough to keep interest from bringing their balance over the limit! Those payments are funds that could be used for other things like savings, vacations, home improvements and family fun.

Any type of debt can also have negative consequences on your future financial and professional status. Although proper use of credit cards can increase your FICO score and make it more likely you will be approved for things like car loans and mortgages, a high debt-to-income or high debt-to-credit limit ratio can reduce your FICO score. Your debt can even cause problems in the work place as more companies are running credit checks before hiring applicants. This is especially true for management or financial positions.

Benefits of Getting out of Credit Card Debt

When you learn to pull yourself from the mountain of credit card debt, you take control of your own finances. Benefits for yourself and others incl...

... middle of paper ...

...ommon Obstacle to Getting out of Credit Card Debt

One of the biggest obstacles many people face when dealing with credit card debt is the constant emergency. They use all their funds to pay down debt. When the car breaks, medical bills arrive or another emergency comes up, they are forced to pay with a credit card. The best way to avoid this obstacle is to plan ahead. Before and during the time you start reducing credit card debt, create a savings account for rainy days. At minimum, save $1,000. You will be even more stable if you save a few months ' worth of expenses.

Paying off credit card debt is not an easy thing to accomplish, but you will gain so many benefits. You will take control of your life, your future and your finances, reducing stress and increasing overall quality of life. Get started today by defining what you own and creating a plan to pay it down.

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