Credit cards represent the ultimate in convenience. However, there is also a dark side associated with them. Many people are afflicted with credit card problems, often through no fault of their own. The power differential between credit card companies and consumers is being addressed with legislation, but it still is and will remain an unfair fight. Here are some top credit card problems that many people face
1) Obviously, the main problem is tons of debt. What is the average credit card debt in America? Good question – estimates vary, but many put the number at around 8000 per household. This debt can weigh down families, causing stress and negatively impacting their purchasing power.
2) Confusing small print. Credit cards bury their policies in complicated and wordy legalese, making it difficult for the average American to understand just what they are getting into. Before they know it, they are paying a huge interest rate on a balance that they can’t pay off, leading them down a death spiral.
3) Getting stuck on the minimum payment treadmill. Credit card companies want consumers to pay only the minimum, as this keeps them in debt for a long time. Many don’t appreciate how much they pay in interest, and how long it will take to pay off the debt, when they only pay the minimum payment every month.
4) Late fees, overbalance fees, and missed payments. Credit card companies will often “let you” go over your limit to save you from ’embarrassment,’ only to slap you with a fee. And beware if you miss payments or are late – you’ll be hit with even more fees, making your position even worse. This financial violence also damages an individual’s credit score, often beyond repair. When they have to make a major purchase later, many find that they are impaired by a credit score ravaged by credit card debt.