Kentucky consumers who are attempting to get out of credit card debt may want to make more than the minimum monthly payment. According to the American Consumer Credit Counseling, individuals should put 5 percent of their income toward paying down debt. However, paying anything above the minimum required payment is considered a good move. This is because it can take about 23 years to pay off a balance of $8,000 making only minimum payments.
Good credit is becoming more and more important in Kentucky for a variety of reasons. It's certainly essential when borrowing money or financing a purchase. Not only can credit help one qualify for a better rate, but it often determines approval or disapproval. Landlords regularly check credit standing, prospective employers may ask and even utility companies now want to find out a potential customer's bill-paying history. Repairing bad credit makes sense, and the sooner the better.
Kentucky residents and others who need help paying bills or other expenses may benefit from using a credit card to do so. Generally, it can be a good idea to use a credit card for bills that can be paid off in a year or less. They can also be ideal for those who can pay off the balance quickly and want reward points.
People of any socioeconomic level in Kentucky might have credit card debts. This is not necessarily a problem unless people charge more than they can realistically pay back. Low-income people with no net worth rely on credit the most often, but affluent people also carry high balances, according to data analyzed by ValuePenguin.
When the recession struck in 2008, consumers in Kentucky and nationwide tried to whittle down their debts. A survey conducted in 2009 by the Consumer Federation of America found that the number of people focusing on debt reduction rose to 44 percent from 38 percent the previous year. The passage of a few years, however, has reversed this trend as more people lean on credit to make purchases. As of the first quarter of 2018, household debt had hit a record high of $13.2 trillion.
According to the Census Bureau, more than 183 million Americans have credit cards. This makes credit cards so prevalent that 70.2 percent of all American households rely on them. With that being said, any individual in Kentucky looking to get a credit card needs to know two things: what their credit score is and how they can make it better. Unfortunately, there is a lot of misinformation that circulates around when it comes to that second question.
Credit card debt can be difficult to overcome, and taking cash advances can make it so much worse. Everyone with a credit card has received this in the mail - the tempting offer to take cash advances from a credit card (such as using a credit card at an ATM). During the summer months when consumers are on that much need vacation, what could it hurt to take a little quick cash from the credit card?
Convenience fees charged for the use of credit cards are particularly high. For example, on average, $262 worth of convenience fees are expected for every $10,000 worth of debt. The interest on credit card debt, charged by the credit card company, is also exceptionally high. For example, interest that needs to be paid on the debt will probably outweigh any potential benefits received. Student loans offer far better interest rates.