Credit card debt is one of the largest forms of debt in America today. Almost everyone has a credit card today, with some people even having multiple credit cards that have debt piled up on them. This can snowball, and, combined with other debts, can cause quite a lot of problems.
The way a credit card works is that when you swipe your credit card to make a purchase, the money you spent is recorded with the credit card company. At the end of the month, the credit card company bills you all the money you borrowed from them. If you don’t pay it all off, then you incur interest on that sum, and it is added to your bill next month. By not paying off your credit card every month, that debt can snowball and become unmanageable. Credit card rates also change. The best way to avoid credit card debt is to simply not use a credit card, but, if you need to use it anyway, pay off the debt as quickly as you can before the due date.
Credit card debt is different from other debts in that more purchases are made and put on one loan than any other loans. Credit card payments are different every month. Other loans are much more consistent in their payments. Mortgages, vehicle loans, student loans, and other loans have a set payment, or it varies a very small amount based upon changes in interest rates.
In 2023, credit card debt has reached the one trillion mark. That means that the total credit card debt of all Americans added together is over one trillion dollars. This shows that credit card debt has grown exponentially from previous years.
Credit card debt is a large responsibility. So many people have loads and loads of credit card debt that they are unable to pay off. If you are going to have a credit card, make sure that you pay it off before you start to incur interest.