As I am writing this blog post for Friday the 13th, I considered a piece on the origins of superstition surrounding this date. I think, however, that I have stumbled across something just as scary as the Knights Templar or a hockey masked killer, and that is outrageous credit card debt!
Credit Card Debt Can Happen to Anyone
Credit card debt is something that millions of Americans struggle with, and according to a recent CNBC article not even Supreme Court Justice nominee Brett Kavanaugh is immune. It has been reported that President Trump’s recent nominee to the Supreme Court racked up between $60,000 and $200,000 in debt on several credit cards and a loan during 2016. This information was discovered in a review of required disclosures the nominee submitted as a federal judge. It is reported that the debt stems from several home improvement projects as well as recreation for friends and family.
This amount of credit card debt would be financial ruination to most households across the U.S. With the average interest rate on a credit card around 17 percent, it would take a lifetime to pay these cards off if only the minimum payments were made each month. Interest rates are continuing to increase as the Federal Rates rise.
I suppose that, luckily for Mr. Kavanaugh, he may have had the financial resources to pay all or most of that debt. His most recent disclosure shows no credit card debt for 2017 and a $15,000 balance on a retirement loan. Most of us could not pay off $60K to $200K of debt so quickly!
The Severity of Credit Card Debt
In a perfect world, no one would ever carry a balance on a credit card. Credit cards can be great for convenience, travel and various rewards programs. However, the rewards programs are just about always uneconomical if you carry a balance. The big problem with credit cards is that they are too easy to get and use! If is very hard to stick to a budget when you are regularly using your credit card for expenses. It can get out of hand very quickly.
Putting It to an End
So, what are some of the best ways to tackle credit card debt for the rest of us? If you have multiple cards, it is a good idea to tackle the ones with the largest balances and interest rates first by making more than the minimum payments each month. This will cost you less in interest charges in the long run. Paying off cards with small balances that you could pay off quickly by making other adjustments to your budget is also a good way to start knocking out the debt and that may provide a psychological boost.
Sometimes, people simply amass large credit card debt because of an unexpected life event and, no matter how hard they try, it can’t be paid off in a reasonable period of time. This, then, becomes a vicious cycle of debt. The burden and stress it can take on individuals is real and full of unimaginable pressure.
If you are struggling with any type of debt situation and feel like you cannot manage it alone, please contact our office nearest you. One of our experienced attorneys will sit with you and discuss a plan to get you free from financial worries and the accompanying burden.