Over the last few years we have seen the economy rebound. This is great news! However, with all the good news comes, not so good news. A lot of Americans have spent about five years living very tight. Now that the economy is getting back on track, spending is also coming back.
More Credit Cards Means More Debt
The average American has 3.7 credit cards. Experts at CardHub believe that around four cards is where you start to see financial life overly-complex.
Here are some tips to make sure you don’t find yourself in a credit card dilemma:
Use cash whenever possible. By using cash this allows you to only spend what you have. This also ensures that you don’t go into debt or spiral out of control.
Why Retailers Want You To Get Their Store Credit Card
Don’t accept the 10% off with today’s purchase. Retailers like to entice a shopper to sign up for their credit card by giving you a discount at the point of your purchase. Often times the retailer’s credit card is only for that particular store only. The store wants an individual to open up a line of credit at their store because it allows the shopper the ability to shop more frequently at their store. Meanwhile, the individual that has a card can start making purchases and their credit has a potential of spiraling out of control.
Closing Credit Accounts Hurts Credit Score
Be careful about closing your credit card accounts. The length of your overall credit history makes up about 15% of your overall credit score. If a person has a card they no longer use, but they opened that line of credit 20 years ago, that will affect the individual’s credit score. The reason is due to shortening your credit life. That 20 year history would no longer be active in the eyes of your overall credit score.
Setting up automatic payment can be good and bad. Making your payments on time is a great thing to do. It allows your creditors to know that you do in fact pay your bills. Not only are you paying your bills, but you are doing so on time. The bad part of this comes when a person opens up a line of credit or they spiral out of control with the credit cards they currently have. This causes the automatic payment become so uncontrollable that the person can no longer live a healthy financial lifestyle. Once the automatic payment is taken out of the bank account it is associated with can leave the card holder with overdraft bank fees and ultimately cause severe harm to the persons credit score. Not only can the credit score be hurt from this, but the individual’s health can start to deteriorate as well. This can cause a huge amount of stress.
If you find yourself in a lot of stress due to credit debt, read our article about living longer with chapter 13 bankruptcy.
If you are experiencing hard financial times due to an overwhelming amount of credit card debt and need to get your debt under control, call Castle Law Office at 816-842-6200 to speak with an attorney. Or you can email us and schedule your free consultation.