If you’ve heard credit card debt called “bad” debt, NJ’s bankruptcy attorney is about to tell you what’s so bad about it! While debt can come in a lot of different forms, it’s credit card debt that tends to be the worst. Here’s why, and how to get out of it for good!
Credit Card Debt Usually Comes With High Interest Rates
Credit cards look so appealing. They’re cool, convenient, and easy to use… but they come at a cost. While many cards offer low introductory rates, these rates usually skyrocket into the high 20s in terms of APR. An interest rate of 20% essentially means that, for every $100 you spend, you have to pay $120 to pay it off. On the other hand, most car loans, home loans, and other loans are usually more in the 5-6% range. You’d only have to pay $105 back at 5%, saving you $15. On $100, this isn’t a very big deal. But what about $10,000? That’s much closer to the average credit card debt that Americans carry, and at that level, you can see how 5%, 10%, or 15% could make a huge difference.
It’s So Easy to Put Things On The Credit Card… Until The Fees and Fines
Not only are credit cards easy to get, they’re easier than ever to use! That’s why bankruptcy attorneys in NJ spend so much time helping people get out of credit card debt. Just a quick swipe, or filling your information on an autopay form, and that credit card balance just keeps rising. If you miss a payment, can’t afford your minimum, or otherwise spend too much, you may be hit with even higher interest rates, plus fees and fines. These also accrue interest. Suddenly, every expense just cost twice as much—and your paycheck stays the same size.
How Filing for Bankruptcy in NJ Can Start a Better Relationship with Credit
If you have just a few hundreds of dollars in credit card debt and you’re having a hard time making payments, cut it up or otherwise stop using it. But by the time you’re in a financial mess, you may realize that you’ll never get above water with all the interest and fees! At that point, bankruptcy can help you get above water again. You have the opportunity to eliminate those debts and “reset” your credit after a period of time has passed, as long as you follow your bankruptcy plan.
Don’t get stuck with credit card debt you can’t afford to pay. Call Robert Wachtel today for a free consultation to find out if declaring bankruptcy in New Jersey is the right choice for you.