Sound Familiar?
No one gets a credit card planning to go into debt, but credit card debt is currently sweeping our nation. Eventually, something will happen that may tempt you to use your credit card to make a purchase that you would otherwise not be able to afford.
Maybe your credit card company raised your credit limit, making it harder for you to keep your spending in check. Maybe you were planning a wedding and needed a little extra help paying for some of the supplies. Maybe cash was tight, and you needed to use the credit card to pay for some of your utilities. No matter what happened, you may suddenly find yourself with a higher statement balance than you can afford to pay in full.
The Credit Card Trap
The scenarios we just described are situations many people experience. Unusual circumstances can shake up your routine, which may make it harder to keep up with your normal money management strategies.
Because of their immense convenience (and possibly also because they don't require you to specifically watch your money leaving your possession), credit cards make it all too easy to spend beyond your means. Unfortunately, it's also easy to rationalize the extra spending. "It's okay just this once," we tell ourselves. "I'll pay it off soon enough that I'll barely notice the interest."
However, the truth is that many people rarely follow through this promise. Even though that big expense that tipped you over your limit may have been a one-time thing, the rest of your monthly obligations will stay the same. You may keep using your credit card out of habit and/or convenience, causing your overall balance to steadily increase. Before you know it, you may find yourself faced with a formidable debt that seems impossible to get out from underneath.
Fighting Your Way Out Of The Trap
Should you find yourself in this type of situation, it is important that you take action immediately. Allowing credit card debt to remain unpaid will likely hurt your credit score. If it remains unpaid for long enough, you may also find yourself being sued by creditors for your delinquent debt.
If you notice that you are accumulating a significant balance on your credit card, stop using it. Switch to cash or your debit card for your monthly purchases. At the very least, make the minimum monthly payments on your credit card. Because credit cards often have high interest rates, it may be wise to focus your attention on eliminating this debt first and foremost. Put any extra money towards repaying this debt.
It may take several months or several years, but if you make the minimum monthly payments without continuing to rack up increased debt, you will eventually be able to get your credit card paid off.
Avoiding The Trap Altogether
While it is possible to get out of the credit card trap, your best bet will be to avoid falling into it altogether. Using a credit card requires a great deal of financial responsibility. If you can't trust yourself to only use your credit card to make purchases you could just as easily make with cash, you may be better off sticking with a debit card.
Get The Benefits Of A Credit Card WITHOUT The Risk!
One of the primary reasons many people sign up for credit cards is to get the cash back rewards they offer. However, credit cards are no longer your only option. If you are interested in being rewarded in cash for purchases you make every single day, ask our local bank at the Lake of the Ozarks about Kasasa Cash Back® Checking.
Our Kasasa Cash Back® Checking account doesn't have any monthly fees. In fact, this account PAYS YOU by refunding ATM withdrawal fees and rewarding you in cash for your monthly purchases. Earn 4.00% cash back on all your purchases - up to $120 per year!*
Contact First Bank of the Lake for more information.
Qualifications and rewards may vary by account. Account approval, conditions, qualifications, limits, time frames, enrollments, log-ons and other requirements apply.
Contact institution’s service representative for additional information, details, restrictions, rate calculations, processing limitations and enrollment instructions.
* APY = Annual Percentage Yield Member FDIC
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First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.
Located at the entrance to the Osage Beach Premium Outlets!
4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065
4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065
(573) 348-2265
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