Did you know that one of the worst types of debt is credit card debt? No one really likes to be in debt at all. Student loans, mortgages, and even car loans, though, aren’t nearly as bad as credit card debt. There are several reasons that this type of debt is absolutely the worst type you can carry. Here are just a few reasons that this type of debt is the worst type.
First, this type of debt is dangerous personally. When you take out a car loan, you know exactly what you’re getting into, and you know how much money you owe each month. You pay down the loan until it’s gone or you get rid of the car and pay it off. This is predictable and safe, and it keeps you within certain financial boundaries.
With credit card debt, though, you aren’t always in control of payments and such. If you rack up more debt one month, your monthly payment could jump up. Plus, credit card companies often change interest rates and charge you extra fees. Even a minor jump in interest an make a huge difference in your monthly payments. This means that credit cards can be tough to factor into your monthly budget unless you’re always working down your balance.
Secondly, this type of debt most affects your credit score negatively. Because this type of debt is most dangerous and unpredictable – it’s called revolving debt because it can change from month to month – it can really sink your credit score. If you have a high balance on your credit card, this can be a huge problem for your credit score.
Overall, credit card debt is the main reason that people go into bankruptcy. While bankruptcy can get rid of your credit card debt, it can also have some serious ramifications. Because this type of debt can easily snowball out of control, it’s important to keep your credit cards under control, no matter how many you have or how long you’ve been using them.
Credit card debt can ruin your life if you aren’t careful. This is why it’s important to stay on top of your debt so that over time you can get out of it. If you’re having trouble with your credit score, this is the best way to improve it. Simply get rid of a few cards and pay them totally off.