Debt Dangers Beware of Credit Card Debt

Everyone is in debt nowadays, right? Well, not really, however, we do have more people in debt than ever before, and that number is continuing to skyrocket. The reason for this? In a word: Money. The credit industry has realized that they make more of a profit off of less responsible people. So, in today's world, it's easy to get credit, even if you're already in debt - even if you're already struggling to make ends meet on your income.

Think about it. You get offers for credit in the mail, in your email, by telephone - you can't get away from it. Having more credit is awfully tempting to someone who is already in a financial mess.

Maybe they need to buy their kids clothes for school, or perhaps their car needs new tires, or maybe they want it just as a safety; but guess what - the credit card companies know this - and they utilize these weaknesses to make a profit. So, before you sign up for another credit card, consider all the dangers that being in debt ensues. For one, your credit score. The more debt you have, the worse your credit rating - even if you pay on time. While your credit report will show that you are conscientious about your bills, it will also show that you are overextended.

It will show how much credit you have available to spend, what your current balances are, and the total amount of lenders you owe. They use this information in the equation that makes up your credit score. For another, it can cause all of your credit card interest rates to rise. With the Universal Default Clause, your creditors can raise your interest rate if you are late on even one payment - that means ALL of your creditors, even if you've only been late once to one lender. They can also alter your interest rate if you've recently maxed out your credit from any individual lender.

Remember, their goal is to make money, so they don't care if your credit is "good" with them - if you default, make late payments, and/or charge up a balance with any of your lenders; it is within their rights to increase your interest rate. Last, but not least, it is dangerous to the quality of your life. Being stressed about your debt situation can alter your lifestyle; from how you interact with others to being able to buy the home of your dreams.

Chances are; if you're in debt, it is affecting more than your finances. Be aware of the debt you carry and be smart before adding any additional debt to the mix. Get information, get help if you need it, and take proactive steps to reduce your debt. You, your finances, and your life will be far better off.

© 2006, Kathy Burns-Millyard. Read more about How Debt Affects Your Credit Score at


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