While there are many ways to put money back into your pocket, spending money is not the best method to do this. Credit card companies seek to not only normalize the daily use of charge cards, but they also seek to increase the spending of consumers in Kentucky and elsewhere with incentives such as cash-back or rewards. This results in many Americans racking up debt just so they could obtain certain rewards. And when this debt gets out of hand, one is left seeking ways to reduce and even wipe out this debt.
The problem with cash-back credit cards
Rewards credit cards can seem like a great idea. For those who pay off their balance each month, this can feel like a major perk, as it is like getting free money or rewards just for shopping. However, roughly half of all Americans carry a monthly balance on their credit cards. In fact, most carry a balance that is more than $1,000.
With the rising interest rates, this can create a never-ending problem. A consumer’s debt increases due to this debt that is carried over each month, and in some cases, the debt continues to increase due to spending incentivized by the rewards earned by making purchases with the credit card.
Overcoming this debt
When an individual cannot pay more than the minimum each month or begin missing payments, this can create a major financial problem. For some, it may be beneficial to consider a balance transfer credit card. However, one needs to be conscious of the terms associated with this. In some cases, it may be possible to work with a credit card company to settle the debt. For many, the best option may be to reduce or discharge this debt through a bankruptcy filing.
Whether you are in credit card debt because you were chasing rewards or because you were faced with financial woes, the truth is that it is possible to address this form of debt. While it can feel overwhelming, filing for bankruptcy can be the real answer. Thus, it is important to consider this and other debt relief options to determine what is most suitable for your situation.