When people have to file for bankruptcy, you may often hear them talk about their credit card debt. They will say that they just had too much debt on their cards and that those cards led to bankruptcy.
This creates the perception that credit cards are bad, as if the cards are causing bankruptcy on their own. Is this a risk that you face if you decide to take out a credit card?
Considering how you use them is key
Financial experts generally say that credit cards are not bad or good. They’re just a tool. They exist and help you make financial purchases. How you use your credit cards is what makes them either a good or a bad decision for you personally.
For instance, a lot of people get into problems with their credit cards when they don’t pay off the balance at the end of the month. This means that they have to apply a relatively high interest rate to that balance.
If they were already pretty close to their budget, or even exceeding that budget, making them unable to pay the credit card, then odds are even lower that they’ll be able to pay it the following month. With the added interest, the debt that they have created is simply going to continue growing exponentially.
On the other hand, those who simply pay off the balance of the card every month don’t have to deal with this interest. They would probably say that credit cards are a very useful tool.
Unfortunately, what happens with your credit cards isn’t always up to you. A lot of factors that are out of your control can cause you to find yourself facing unaffordable debt. If you are, you may want to consider bankruptcy and the other options that you have.