You can’t really say that Americans have ever been out of credit card debt. Both before and after the recession credit card use has become a fact of life. While consumers continue to prefer debit cards for smaller purchases, the average household credit card debt continues to grow. There are number of factors behind this, including long stagnating wages, increases in the costs of housing and healthcare, and unhealthy spending habits. Extravagance is the least of these problems, in fact many people are using their credit cards to stretch their dollars further or get some sort of payback in the way of points or even cash back. In a way, carrying debt is being incentivized.
There are number of approaches to knocking down credit card debts. The first thing you have to do is take a look at your expenses and sort out the things that you really need. Your basic needs are a roof overhead; money to pay your bills such as electricity, gas, Internet, and phone; basic medical care; food and clothing; and transportation. Now let’s acknowledge that is a lot, even for one person. When you multiply those basic needs by the members of the family, it can start to look a little hairy. If you add in student loan debt or medical expenses from an accident or chronic condition, things can get very tight in a hurry.
Understandably meeting these needs sometimes means that needs get shuffled, and basics expenses are put onto credit cards instead of being paid with debit cards or cash. This is the beginning of what is called a “debt spiral.” In a debt spiral, you find that your money will not go far enough, so you borrow or charge. In order to pay off the borrowed amounts and charge balances, you borrow more money, or transfer balances. It goes around and around and around until one day you find that servicing your debt is taking more of your money from your basic needs than you can manage.
There are number of ways to manage debt, from consolidation loans, to balance transfers and pay downs, to bankruptcy if you are in deep enough you need to reorganize or liquidate. When you are in debt, you need to be able to see a light at the end of the tunnel, and you need to act quickly before your debts become even more onerous.
If you think that you are getting in over your head with credit card debt, and would like a professional opinion on what it would take to get control, contact our office for free initial consultation. Our offices in Fort Lauderdale and West Palm Beach are open seven days a week, and once again that initial consultation is free. We have lots of experience dealing with all kinds and amounts of debt, and understand that debt is rarely simple. Call us today and let’s get started on taming your debt.
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