8 Must-know Things About Credit Card Debt


Credit card debts are the easiest to accumulate. The reason for this being that credit cards are readily available and accessible for eligible applicants. Another reason could be that these are easily acceptable for any sales around the world. Do check out credit card interest 2021.

A few things that an individual should know about credit card debts are:


A credit card debt carried from one month to another creates pressure and a bad burden as it eats up the individual’s funds.

The cards have no kind of positive effect on savings or any other form of investment. Instead, these constrain the individual in a high-interest mess in cases where the individual ends up with any monthly balance at all.

There might be individuals willing to pay the whole bill off at one go as soon as they receive it. But again, there are chances that the individual would be charged up more which would be very difficult for the individual to handle in a single month, and this way, the debt starts piling up.

To start with an easy load, it is often advised to follow the 30% rule.

The credit card balance that an individual carries should be at least less than the minimum 30% of the absolute limit.

This would ensure that the credit score and the ability of the individual to pay the amount in full are not diminished.

Delayed Payments

It is essential to check the card’s terms which list the late payment conditions. The minimum amount mentioned in the monthly statement can be paid without penalty for around 21 days, even after the due date.

If the individual has a good past payment history, the credit card company might extend the duration to around 60 days. But after this, if the debt is still not paid, the individual might get calls and other actions taken against them. Other than this, the credit card interest rate applicable will keep on increasing your debt too.

Debt Affects your Credit Score

Debt can highly impact an individual’s credit score. 

Your debt should always be less than 30% of your credit limit. Many personal finance experts advise keeping the credit utilization ratio as low as possible.

However, if your credit utilization ratio is higher, make sure you make all your due payments on time.

Never go for minimums:

It is a tactic used by the lenders that portray that the individual’s burden could be reduced, increasing the expenses and turning out to be a profit for the lenders.

The minimum payments are offered to cover a little more than the actual interest due on the card.

Cautious of debt settlement companies:

There are so many chances that the debt becomes more than the individual can deal with.

In such cases, it is essential that the individual directly works with the credit card company itself and explains the financial situation the individual might be facing.

One must keep in mind to never use services from the companies which assure debt settlements. These companies have no promises and might end up causing even more problems for the individual.

Credit or Cash?

Credit cards come with the terms to spend more than what they would do in cash.

The debts are also caused when a certain amount of money is exceeded that possessed, which is when the individual is forced to pay interest on those purchases.

It is therefore advisable to use cards only when short of cash or not to use debit cards.

Final Option:

The last option is when all the gates are closed, and there is no way out of the debts on the credit card; the individual should consider filing for the option of bankruptcy and clean the slate to start over.

The individual would surely face a negative impact on the credit report for a minimum of 10 years but can rebuild it slowly. Therefore, this must be the last option that an individual opts for.

Post Death

There are cases where credit card debts continue after the death of an individual. 

Suppose it is the situation wherein the individual holds a joint credit card account with someone who has died or the position where the individual uses the credit card of someone who has passed away. In that case, it is for sure that the individual would be liable for the debt on the card.

Such cases should be adequately taken care of! Now that you are well aware of credit card debts and the do’s and don’ts associated with them, you can apply for a credit card online.