Do you currently have one or more lines of credit? There are definite benefits and downsides to owning credit cards. My uncle is, in fact, the only person I have ever known who does not and has never owned a credit card in his life. This has caused him great inconvenience at times, such as when he needed to rent a car in an urgent situation and the company would not allow him to do so without providing a credit card number. He offered to pay cash and was denied!
Many people believe that cash will one day become obsolete and all financial transactions will be conducted in electronic forms. The problem is that credit cards are quite easy to obtain and just as easy to use but we don’t always have the means for paying off our balances every month, which can quickly escalate to serious financial crises.
The average cost of living in most of the 50 United States has significantly increased in recent decades. Long ago, it was not only feasible but common for households to operate on single incomes, usually including families where a father went outside the home to work and a mother stayed home to raise children and otherwise maintain the household. Nowadays, many married couples lament not being able to survive unless both parents take on full-time jobs.
Numerous issues cause typical U.S. families to incur major credit card debt. The average household carries as much as $15,000 in credit card debt. If minimum monthly payments are not being met, interest rates may soar, thus adding to the total debt amount. Not every person with serious credit card debt trouble wound up in such a predicament due to personal spending habits.
It’s true that using credit as cash without having the means to pay off your balance every month is a bad spending habit that can land you in serious financial trouble. However, most families in the U.S. today cite the following issues as well, as primary causes of serious credit card debt:
Medical expenses: The general population in the United States is unhealthier than it has ever been. Regardless of the underlying causes of ill health, there’s no denying that the medical treatment needed to help people overcome their adverse health issues is expensive. Even a single emergency room visit or surgery can lead to a financial crisis. Many people are unprepared to meet unexpected medical expenses; thus, many people use their credit cards to pay their medical bills but are unable to pay off their monthly balances.
Job loss: Unemployment continues to be problematic in many U.S. regions. If one or both breadwinners in a household lose a job and there is not sufficient savings set aside to overcome such a crisis, it can easily lead to serious credit card debt. Families still have bills and still need to eat whether or not anyone in the house is employed. In such situations, it is not uncommon for people to rely on credit cards to sustain their daily living needs.
Taxes: Not everyone enjoys a substantial tax refund each year. In fact, many people wind up owing a lot in taxes and use their credit cards to foot the bill. Paying in a lump sum helps avoid penalties, especially for those who do not send quarterly payments throughout the year.
Divorce: Ending a marriage in court costs money. From legal fees to other issues, such as child support, alimony or having to buy or rent a new home, getting divorced often leads to credit card debt.
There are often several options available to secure debt relief. For some, it’s merely a matter of tightening the purse strings, staying home more, spending less, separating needs from wants and adjusting spending habits accordingly. Sometimes, assets can be sold. The old cliché, “One person’s junk is another person’s treasure,” is true and many people not only find that selling things online helps them increase their cash flow and overcome debt problems, some wind up turning their sales into legitimate businesses that not only help them pay their credit card debts but ultimately become profitable endeavors that generate consistent revenue!
Writer Bio: Judy Dudich
Judy Dudich resides in the beautiful woods of Pennsylvania, where 24 acres of land and a home-office provide the perfect setting for her children’s home-education and her own homesteading and business ventures. Life is full of blessings (and challenges!) for Judy, as a wife, mother of 10 and Grammy to six. She is a published author, whose book, “I Surrender/A Study Guide for Women” continues to encourage and support others in Christian family lifestyles throughout the world. Judy has also previously worked in the online speaking circuit. Her passion for permaculture, re-purposing, foraging and organic gardening fills her days with learning and adventure that she loves to share.