Many people in Kentucky carry high levels of credit card and other types of consumer debt. Some tend to use credit cards in order to purchase things they cannot otherwise afford. It is important for people to try to address their credit card debt, as significant debt levels can cause many financial problems.

People may wrongly assume that they need to carry debt in order to improve their credit scores. That is not always true, since many people overspend, leading to high debt-to-income ratios that reduce credit scores as a result. Lowered scores can make it more difficult to qualify for mortgages or car loans as well. People also may end up having to devote a large portion of their income to debt repayment, leaving little with which to enjoy daily activities.

Some users may be able to consolidate their credit cards to a single, lower-interest consolidation loan. If possible, people should also try to make larger payments in order to pay off the debt. Debt payments should be budgeted in the same manner utilities and house payments are, as skipping payments leads to credit problems and fees.

Attacking credit card debt is not easy, and in some cases, people are so far behind that the debt is simply unmanageable. Those who are unable to afford their debt payments and are in danger of a garnishment or foreclosure may want to consider petitioning for bankruptcy. Depending on the person’s financial status, a Chapter 7 or a Chapter 13 petition may be appropriate if the person is eligible. If an unsecured debt like a credit card is discharged in bankruptcy, this can help the debtor to have a fresh financial start.

Source: GO Banking Rates, “Why You Need to Start Treating Your Debt Like an Emergency”, Ashley Eneriz, Jan. 18, 2015