Credit Card Debt

Credit card companies extend credit, or rather, LOAN you money on the expectation they will be paid back. You are borrowing money from the bank or institution that has extended the credit card to you. REMEMBER: If you don’t pay it back, the bank wants something in return and it’s in the form of interest.

STOP using your credit card for purchases when you do not have the money to pay off the balance when you receive the bill. Even small amounts remaining on a card costs you money. Money that you could be using for other important things, such as food, shelter, college education, or saving towards retirement.

If you are an average household, you are carrying an outstanding credit card debt of $8,000. With an APR of 16%, the average U.S. household, is paying approximately $1,280 in interest every year to their credit card provider.

Using a credit card makes you feel richer than you are. Suddenly, the extra $10,000 available is equal to getting a raise. Likely, if you have credit card debt problems, you have 5 or more credit cards with outstanding balances. It is not unusual for clients to have minimum monthly payments in excess of $1,500.

At first, you may not notice that your credit card balances continue to grow, particularly if you are only paying minimum monthly payments. Sooner or later, you are unable to pay the minimum for all of your cards along with your other financial obligations with your current income.

You may even open a new card or two because you don’t have enough money to buy necessities. This only increases your monthly minimum payments causing more problems.

You have now limited your choices. It may mean declaring bankruptcy. It may mean that you might have to withdraw money out your retirement. Or perhaps borrow from your family or a friend.

Do not wait. Do not put your head in the sand and expect things to change! The quicker you make changes the faster you can stop this downward spiral.

• Do you have five or more credit cards each with an outstanding balance that has not been paid off?
• Have you opened additional credit cards to expand your credit line?
• Do you only pay the minimum monthly payments?
• Do you haphazardly throw extra money towards your credit card balances, hoping someday to pay them off?

If you answered yes to any of these questions, do not wait another day to contact us for help.

Mark and Mary have been married for over 10 years. They have two young children in grade school. They do not spend money on elaborate vacations or expensive clothing. Their house is nice, but not the largest on the block. They lease both of their cars believing they are saving money.  Mark, the breadwinner for the family, is an executive for a large company, and his salary is approximately $250,000 and receives a variable yearly bonus.

It is enough money for Mark to wonder why they live paycheck-to-paycheck and don’t have a small savings account for minor emergencies. He is the one who contacts me. He is concerned and stressed out. While they can pay the minimum balances on their outstanding credit cards, and sometimes pay extra, the balances continue to grow! In past, he has used his yearly bonus to pay off the balances, but this year he may not receive a bonus.

We can help by determining where your money is being spent.