Need a respite from credit cash debt, consider cash loans or personal loans. Studies suggest, an average American aged around 37 years carries $5,100 in credit card debt. It actually means a lot more. It means a recurring monthly expenditure. It's like an endless loop - a deadly trap! Let me explain, how it happens.
Credit card debts - the trap
Obviously, credit card facilities offer convenience for consumers. Today's world is driven by the spirit of consumerism. We make several purchases. We spend money for home improvement or luxury; we book airline tickets or hotels; we even have to spend for expensive gifts because of social obligations at times. And we dare not to pull out the card to make immediate payment. New loans get added to the already existing loan hazards leading to a complete death trap.
Why credit card debt becomes unmanageable?
Well a lot of time people just wonder what is wrong with credit card debt? Dear friend, the big difference is the APR (Annual Percentage Rate). Even with good credit score, the APR for credit card may be as high as 13.15%. It means you are paying more than $13.15 extra for each $100 loan amount. You may actually be paying even more than that. A bad credit score will increase the APR and a higher APR means you have to pay more and more towards accrued interest each month.
Well none of us have ever gained access to the 'treasure island'. We mostly have to afford things within our regular monthly income. Mandatory credit card debt repayment makes our life really miserable. Because you have to pay it monthly - each month, months after months, almost forever. Unfortunately, a lot of us do not really express much concern for such regular monthly burden. They just get used to making such monthly payments. They start considering it something like paying for rent or electricity. The factor that they overlook is the interest overhead. They eventually pay more price than the price of the commodity. Further as you make repayment regularly, companies can increase your credit limit. It reflects your financial soundness. And at the same time, it lures you to spend more through credit card.
Steps to Repay Credit Card Debt
First of all stop pulling out your credit card every now and then. Use it only if it is the only means of payment. It is better to repay the existing loans. You can consider alternative loans, like a personal loan. With identical credit score, APR for personal loan is almost half starting from 6.78% (for credit card, recall, it is 13.15%). Consider a personal loan from some funding company having good reputation. Opt-in for a two to three years repayment plan. Clear your existing credit card debts. Promise that you will never ever enter into that deadly debt trap!
For a list of legitimate agencies offering personal loans, check out our quick link section.
2 comments:
this seems to be an eye opener even for Indians like us. I, myself, is also suffering due to the never ending trap of credit cards. and truly it has become a fixed monthly expense for me. Good suggestion. Thanks and may be I will seek this route of escape for getting rid of this trap.
Helpful imformation
Thanks. I hope you'll recover early from outstanding debts.
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