Should I Get A Credit Card?


Credit card debt continues to mount for millions of people worldwide. We continuously hear radio ads stressing the dangers of too many financial obligations, and at the same time, the ads push their next best solution to the problem. However, what they fail to mention is the effect on your credit score and the ensuing high interest rates caused by a low credit score.


Credit Cards and Your Credit Score


The truth about credit cards is that you can, and should, use them to help build your credit score. The catch is that overuse gets you in trouble and suddenly you find yourself unable to make the payments. Your credit score takes a hit when your debt to income ratio shows high debt to low income, and your score follows suit.


On the brighter side of things, when your ratio improves, and you show that you increasingly pay more than the minimum payment, your score begins to rise. If you maintain the pattern of on-time payments with a smaller balance every month, your score shows marked improvement.


Bad Credit is Easy to Get


Surprisingly, many people still rack their credit cards up to the limit and realize they’re stuck making those big payments. Multiply that payment by the number of credit cards they’re using, and it’s easy to see how the proverbial snowball gets rolling. Multiple large payments represent one way that lousy credit begins to affect many people.


The reasons for mismanagement of credit cards are many, but one of the common reasons is the lure of easy credit. The temptation to spend sometimes get the better of people and when money is tight, a credit card is the answer. Before they know it, those payments get too large, and they’re hard to make.


After a single missed payment, the late fees snowball and cause the balance to climb rapidly. It’s a double-edged sword. You can’t make the payment because you don’t have the money, and the fees compound the problem to the point of not paying any amount at all. A mere thirty days later and your credit score takes yet another hit downward.


Desperation Begins to Take its Toll


Most people with credit card debt had, at one time, good credit which is how they qualified for the credit in the first place. A continued good performance with the credit line helped to influence the card company to increase the limit. However, eventually, the payments grew too large, and the payments stopped.


The unfamiliar feeling of trying to figure out how to climb out of the financial hole you find yourself in can lead to feelings of despair with no hope in sight. While low to moderate financial responsibilities is understandable, too much debt ruins your dreams and halts any progress toward financial goals for the future.


Stop the Downward Slide and Get Help


Fortunately, there is help available. Debt settlement solutions exist today that usually have a better outcome for your credit than in earlier years. Any balance that isn’t paid hurts your credit score and continues to do so until a remedy is put into action. It’s best to act sooner than later to stop the rapid drop in your score.


Stay away from debt settlement companies that might suggest bankruptcy as your only choice. Creditors would rather receive their money from you, but in a reasonable amount of time, instead of losing most or all of it through bankruptcy.


Creditors willingly discuss payment options either from you directly, or through a reputable debt settlement company. Many companies have a professional relationship with the major credit card companies and can assist you in developing a workable payment plan to stop the late fees and daily phone calls.

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