Credit cards are issued by an financial institution and it gives customers a pre-set credit limit which he can use to pay for his purchases without having to pay in cash or issuing a cheque. The credit limit of the card is decided by the financial institution depending on the customer’s credit score and monthly income. Credit cards have condition that cardholders pay back the borrowed money, plus interest, as well as any additional agreed-upon charges.
Benefits of using credit cards
- Make transactions cashless.
- Gives rewards or rewards points with every transaction.
- Allows ATM cash withdrawals
- You can get personal loans against your credit card.
- Helps in savings, if used wisely, etc
Credit card ownership is a privilege, but, without responsible behavior, can quickly burden you with unpaid bills that chokes your financial future. Once you get the bill, you are supposed to pay the card bill every month, failing to do the same, the amount gets an interest at on that increase the debt. Not paying average monthly bill is one of the major reason for debt. The results of not paying this debt on time are that the company will charge a late payment penalty and also add on interest to payments and the interest and penalties increase the debt you have. The debt due to, not paying credit cards bill on time is called credit card debt.
Credit card debt is a type of unsecured liability that is incurred through revolving credit card loans. If one, open numerous credit card accounts, with varying terms and credit limits, he can accumulate credit card debt with time. Credit card debt is bad debt because of its high interest rates and low minimum payments, and the fact that it isn’t used to buy appreciating assets.
Credit card debt affects your credit score adversely and can put you among risky borrowers which make getting credit difficult for you. The less debt you carry, better will be your finacial or credit score. And a better credit score will help in better finacial future. So, its important to pay off your debts as soon as possible.
Tips to payoff credit card debts
- Make minimum payment for all your credit card accounts.
- Whenever possible, put extra money in the account with highest interest rate.
- Once you pay off the highest interest rate debt, move to next highest.
- And repeat, untill you finish all the debts.
If you are facing issues regarding credit card debt, you can get a credit counselling or enroll to an debt management program for better understanding and easy ways to pay off the debt.
Credit Card Debt And Neon Funding.
If you have an hight interest rate credit card debt. Neon Funding is the place where all your questions are answered. You can call at Neon Funding’s toll free number to ask all the queries related to credit card debt and its interest.
Credit cards debts can be overwhelming. But a proper guidance, and talking to experts regarding the same can be helpful. Neon funding is your one stop destination for all your queries and to get right guidance regarding your debts.