Credit Card Debt Pitfalls

Credit card debt pitfalls are easy to get into, even for those with relative experience in using and handling them. People who are reasonably responsible with their money often end up overspending on their cards. Here are a few reasons as to why credit card debt pitfalls may happen and a few pointers on avoiding them.

Credit card debt pitfalls

• The hype
  
  There is a constant hype around credit cards. Free money is not a thing and you are not getting any free money when you apply for a credit card. If you are able to spend money that you don’t have at present, it is going to cost you a lot more in the future.
• The fine print
  
  You must have heard the popular adage, ‘The devil is in the details’. It cannot be truer than with credit cards. The fine print has a number of details that you might not have read or simply glossed over. Make sure there are no hidden charges and you know exactly what you are getting into.
• Minimum payments
  
  Most people fall into debt with cards because they make only minimum payments. The thing is that while you are actually OK from the point of view of the card company, your debt will get worse and worse. For a $1,200 debt on 18% and you pay $42 minimum, you end up paying $713.89 extra at the end of the debt just on interest, 89 months later. Never stick to minimum payments.
• Cash advances
  
  Avoid cash advances on your credit card as much as possible.

While it all seems a bit negative, you need to know that credit cards are a great tool for money management. They are really helpful and get you out of trouble in a pinch. Just be careful with how you use them. If you are struggling to repay your debts or are drowning in bills, contact a bankruptcy lawyer in Sacramentofor help. We can discuss your options and find a solution that works for you.