Bankruptcy Credit Card
Bad Debt Consolidation by splinder
Filed under Bankruptcy, credit card debt
Ever since the first widely accepted charge card was issued in 1958 by American Express, everything about how we handle money changed. With time, credit became available on these plastic cards and ‘debt’ (read financial death) soon followed. Bankruptcy too joined in and credit cards became a big reason for it.[br]
As per US Census Bureau, USA will have 181 million credit card holders in 2010. This will further increase the number of bankruptcy files. In fact if numbers are any indicator, America had $972.73 billion of credit card debt in 2008 (Nilson Report, 2009) and there were a whooping one million bankruptcy filings.
How to Avoid The Bankruptcy Credit Card Paradigm
Though it may sound impractical but the best way is not to use your credit card and preserve it for financial emergencies. Remember that money on credit attracts interest and therefore may increase to a figure that might be uncomfortable.
If you plan to use your credit card for regular use, then ensure that you get the following benefits:
· Search for credit cards that offer rewards: There is nothing better than using your credit card and getting rewarded for your spending as well. If you travel a lot by car then go for a gas card.
· Make timely payments that are bigger than the minimum amounts: Making bigger payments ensures that lesser charges are levied instead of hefty default penalties. This is also a smart way of becoming eligible for more credit limit.[br]
· Use balance transfers and cash advances only when in the introductory period: A common mistake that people make is transferring balances and getting charged interest on it. Try using this facility only during the introductory period offering free balance transfers.
· Try using your debit card instead of the credit card: Avoid using your credit card when you have enough cash. Or else pay in full.
Bankruptcy due to credit card is bound to increase as penalty fees will add another $20.5 million to the debt (New York Times), thus making it tougher for people to repay and forcing them to opt for the last resort.