The use of plastic or smartphone technology to conduct transactions has, for the most part, taken over for cash or a checkbook. Many people today do not even carry cash. While debit transactions do not necessarily create debt, the use of technology often makes to easier to amass debt without truly recognizing how fast credit card balances can increase.
Even with the ease of commerce, most people try to maintain a budget to get through each month. Credit card balances do not have to grow rapidly to become a problem. Paying the monthly minimum payment on multiple cards, while paying a car loan and keeping food on the table often leads to a slowly increasing overall debt balance for many households.
Even Emergency Credit Card Use Can Result In Oppressive Debt
Hardworking people also may only use a credit card for emergencies â€”a car repair, repairs on household appliances that are necessary to maintain an orderly life or other similar unforeseen problems. Several years ago, Bankrate estimated that roughly three-quarters if all Americans live paycheck-to-paycheck, with little savings to cover emergencies, according to CNN.
A late credit card payment here or there may be more common than you think in today’s economy. However, as balances increase, interest rates may rise. Late payment fees can become burdensome. Moreover, an emergency, the loss of a job or many other changes can happen without notice.
It is often tempting for people to continue to try to make ends meet when there is not enough paycheck to make it to the next. Paying one credit card with another may seem like a way to buy another day. When the balances get to big, some people try to tap into a retirement account, hoping things will turn around. Unfortunately, people avoid bankruptcy under the belief that all will be lost.
The Exemptions To Protect Retirement Benefits Are Generous
It is critical for you to know that most retirement benefits, such as money in a 401(k), IRA and similar accounts are protected in bankruptcy. If credit cards have blossomed into huge debt problems, speaking with an experienced bankruptcy lawyer may be your best option — before you make a mistake that costs you dearly.
Each household has unique assets, budget problems and family goals that cannot be addressed in a blog post. Maybe that is why the internet is rife with misinformation, misconceptions and myths about what bankruptcy can and cannot do. To get straightforward answers, tailored to your circumstances, it is important to speak directly and confidentially with a caring bankruptcy lawyer.