The Peril Of Consumer Credit: To Drown In Debt

Consumer credit debt is a part of most individual’s lives. Whether you have a small credit card for getting gas or a loan for your car you have a consumer credit debt. Many individuals feel that using other people’s money, i.e. the lender, is a way to get ahead, to get the things that you want or need but cannot afford outright. Others feel that if you do not have the cash on hand then you do not get what you need until the cash is in hand. It is a very simple thing to do, get your first credit card at a clothing store or gas station and feel the benefits of not having that money come out of your bank account right when you spend it. This can have a traumatic effect on your finances though if you keep getting further into debt for the convenience of not needing to pay right away.

How Much Is Too Much?

Consumer credit counseling directives state that if you cannot pay off a credit card debt in one to two months than the purchase is not feasible and should be though out more. Having more than one credit card in most cases is more than a person needs. Once you have multiple credit cards you run the risk of charging up the cards to maximum amounts. If that happens than in many cases all that you will be able to pay is the minimum payment making it hard to pay off any of the cards much less have extra funds to purchase items with cash. This is when you might feel like you are drowning in debt. The amounts of the debt can vary from person to person but the feeling will be the same. That you just cannot seem to get ahead.

Loans

Loans are a part of corporate banking and personal banking, they are a form of consumer debt. They are more structured than a credit card and generally have straight forward terms and payment amounts. The payment does not fluctuate each month and you cannot add to its balance. For some people a loan is a way that they can get out of their credit card debt, paying off the credit cards to only have one payment to take care of. If and when you use this approach to try and get above the water be sure to close all of the credit accounts. It is much easier to get into debt again than you might think, especially if you are used to pulling out a credit card to pay for items. Obtaining a loan for this purpose is also known as debt consolidation and it can significantly help out your credit score and your pocketbook when done carefully.

There are many different programs available to those that are struggling with consumer debt. Credit counseling by qualified individuals whose goal it is to get you out of debt and keep you out of debt is a good way to get rid of that drowning feeling you get when the bills come rolling in.

 



View all 3 of your FREE Credit Scores

blog comments powered by Disqus