Debt Management is Not As Difficult As You Think
Contributed by Andrea P
Do You Have a Debt Management Problem?
The most serious sign of a debt management problem is being unable to meet even the minimum payments on your credit cards. Other problem indicators include exceeding credit card limits, charging items that you are not able to afford and using one credit card to pay off another credit card's balance. With credit card companies offering deceptively low APR's and other deals, credit cards have become a more attractive option than ever.
How Do Debt Management Issues Arise?
According to Bankrate.com, the average APR for most credit cards is 14%. However, rates can climb as high as 25%-30%. Excessive late fees and hidden fine print can also contribute to debt management problems. If you are overdue with a payment even once, your APR may be raised 10% or more, in addition to the late fee.
Credit card companies may also use your past credit history against you and raise your APR accordingly. Another trend is to shorten the grace period between your credit card purchase and the accrual of interest on the card balance. Whereas the standard grace period used to be about 30 days, the new average is 21. Certain cards offer no grace period at all.
Be sure to review all of the terms on your credit card contract. Remember that every courtesy offered by your credit card provider most likely carries an ulterior motive. For example, an offer from your credit card company to lower monthly minimum payments may seem to be an attractive convenience. However, in reality, you are actually contributing to your debt management problems by extending the length of your credit card balance.
