In an economy like that of Wisconsin and the United States, credit cards play an important role, offering convenience through cashless payments to make both major minor purchases. Nonetheless, consumers need to pay off their credit card debts each month to avoid debts that mount with ever-higher interest rates and to avoid being cut off by credit card companies.
The average credit card holder owes $15,000. Failure to settle debts can affect the debtor’s credit score, which, in turn, can affect their ability to buy a home or car, even purchase a low-cost cellphone calling plan.
Poor spending habits, however, are not the only reason why many people end up dealing with huge credit card debt. Medical expenses also can add up to insurmountable levels, and unemployment can lead individuals to use credit cards to make ends meet.
When dealing with credit card debt, the first thing an individual should do is to check his or her credit reports, which can be found at the free AnnulaCreditReport.com website. Doing so will allow a person to fully understand what he or she is dealing with. Be sure to correct any errors on the reports before paying off any debt.
Second, try to pay off debts using household income. This may mean making sacrifices, but the long-term outcome will be worth the time and effort and any delayed purchases.
Third, if no income is available, a debtor can file for bankruptcy. The bankruptcy process may hurt a person’s credit score, but it allows a debtor to settle his or her credit card debts through legally approved methods such as liquidation or reorganization that are specifically designed to get people out of debt.
Wisconsin debtors have options. Those who plan to use bankruptcy to settle credit card debts should speak with a legal professional for more details.
Source: ABC News, “The 4-letter word that can ruin your credit,” Adam Levin, Mar. 2, 2014