Financial industry experts have defined what is considered to be a good kind of debt to have. This would involve a debt that could possibly earn money or create value to someone, such as a mortgage or a student loan. An individual with these types of debt has the opportunity to grow equity in a home, realize capital gains from the sale of a home or establish a higher earning potential with an advanced degree. While these are considered to be types of good debt, credit card debt is widely viewed as bad debt. Unfortunately, a significant number of Florida residents and others across the country don’t see it as a problem.
One of the greatest concerns with credit card debt is how quickly problems can arise. Interest starts to accumulate as soon as someone has a balance. Interest will accrue on the principal as well as the interest itself, until the full balance is paid. This situation is worsened by the fact that credit card companies charge extremely high interest rates.
While problems with credit card usage can exist, the cards can be useful if used properly. Cardholders can earn rewards, build credit and gain protection on purchases made. Experts stress the importance of using the card judiciously so as not to create a cycle that is difficult to stop.
When credit card debt has become a burden, the situation may feel overwhelming to some Florida residents. A knowledgeable bankruptcy attorney can provide much-needed guidance in developing a plan to get finances back on track. An experienced lawyer can help those clients who have a desire to reduce or eliminate the balances on their credit cards.
Source: fool.com, “13% of Americans Think Credit Card Debt Is the Good Kind to Have“, Maurie Backman, Jan. 16, 2018