Many Americans deal with the stress that often comes with large amounts of debt and, in some cases, acquiring too much credit card debt, in particular, may make it difficult for individuals to secure loans for homes or vehicles because of how debt impacts their credit score.
CNBC News notes that most people need a good to excellent credit score to use tools like balance transfer cards to help manage their credit card debt, but before they do, they may want to learn about why they remain under the yoke of this type of financial burden and what causes it.
Skipping payments
Those who find themselves short on bill money may believe it is better to skip a payment rather than pay below the required amount because it makes no impact on the balance and only goes toward the interest. However, skipping a payment can have a negative impact on your credit score, even if they catch up the following month. Those who struggle with their credit card bills may want to contact their creditors right away and inform them of the problem, as credit card companies are typically willing to work with their customers during times of hardship.
Living on credit
It is often much too easy for people to rely on credit cards when their paychecks do not stretch as far as needed. They may use their cards for gas, groceries and other necessities and then find they cannot pay off the balance at the end of the month. Eventually, the balance spins out of control, making it extremely difficult to pay off, especially when users can only pay the minimum payment each month.
Americans can take steps to reduce or avoid credit card debt by keeping one low-interest card for emergencies and avoiding high-interest cards. They may also want to peruse offers carefully to avoid high interest and annual fees.
