Credit card interest rates might be sneaking up on you
Nobody plans on getting in over their heads with debt; it just happens. People on Long Island who are wondering why their debt-to-income ratio continues to get worse often have one place they can look to: their credit cards. Not keeping tabs on how much you’re paying in interest on your credit cards can very easily lead to a manageable debt amount spiraling out of control.
There is certainly a time and place for credit cards. Having them makes life easier in many cases — which is also part of the problem. By making them easy and convenient, credit card issuers can lull people into complacency when it comes to paying down their debt. When signing up for a card, many people are wooed by low interest rates for a promotional period — sometimes as little as zero percent for a time. But those rates don’t stay so low indefinitely.
And it isn’t just affecting people with bad credit. The average interest now for people with fair credit continues to go up. It now sits at over 20 percent, an increase of 2 percent from last year.
Another way people are getting into trouble is by using cards for cash advances. Not only does this increase a person’s outstanding balance, but it often incurs extra fees for the convenience of accessing cash.
Some people might be worried that some ways out of debt, such as Chapter 7 or Chapter 13 bankruptcy, might actually be a worse scenario than what they are facing. However, this is not necessarily the case. An experienced bankruptcy attorney can help people to weigh their options when they find themselves considering bankruptcy.
Source: New York Post, “Average credit card interest up to shocking 21%,” Gregory Bresiger, April 20, 2014