One of the most common causes of debt is the misuse of credit cards. Credit cards, on their own, are not the problem. Instead, the choices people make when using credit cards are the issue. Working with a 4 Pillars debt consultant can help to make significant changes in the way people think about and use credit cards.
Problem Behaviors with Credit Card Use
The most problematic behavior for most people with the use of credit cards is constantly charging purchases. These are often not large ticket items, so it is easy to use the card to buy groceries, add gas to the car, or even when dining out.
Over the day, these small purchases can add up to a significant amount. Multiplying this over a week and then a month quickly leads to balances that are not easy to pay off each billing cycle.
When unpaid balances are carried forward on the credit card, interest is added to the balance. It is not uncommon for this interest rate to be as high as almost 30%, with the average at about 18% to 20%. In addition, if you miss a payment, credit card companies can add fees and penalties.
Solutions from 4 Pillars
Debt consultants at 4 Pillars typically do not recommend getting rid of all credit cards. Today, it is important to be able to make purchases online and to use credit when appropriate.
Instead, they recommend specific credit card strategies for each individual. These strategies include education about the use of credit, maintaining one credit card rather than multiple cards, and choosing cards with the lowest interest rate in the event a small balance is carried forward.
