A large number of U.S. residents are over their head in credit card debt. This prevents them from doing more with their money than making their minimum credit card payments every month and paying the essential bills. A debt consolidation loan may be the solution that gets them out of this trap for good. Interested individuals may find additional facts about these borrowing opportunities online.
What are some of the top reasons for excessive credit card debt?
Major Life Changes
Making big plans can be an expensive prospect that leads people to need more money than they have available. Moving to another state, getting married and having a baby are common examples. Buying a house or renting a bigger apartment may seem affordable in regard to mortgage or rent payments, but people can be easily tempted into buying many items for the new abode with the credit cards.
Spending money on impulse is common for many people, but using credit for this can be problematic. This might happen while browsing a retail store or even a supermarket. A friend asks this person to go out for dinner, and “yes” must be the answer, even if the only way to pay for dinner is charging it. In fact, in a survey from Lending Tree, 31 percent of Millennial respondents noted dining out as the main reason they have credit card debt.
Medical bills rank as a primary reason people get into credit card debt. They try to pay what they can, especially as collectors pressure them to make minimum payments that are too high for their budget. Now they wind up using credit for essentials like groceries and paying the electric bill.
Making purchases on a credit card can be an easy way to track finances and get cash back on transactions, but this is only effective if the full balance is paid off every month. The only exception is with a zero-interest credit card, as long as the entire balance is paid before the normal interest rate kicks in. For people who consistently have trouble making the full payment, giving up the credit habit is advisable.