Debt. It is a word that scares the best of us. For most people, it is a sign of a problem. A sign that their finances are out of control and they need help. Some people even carry debts that are more serious than others. For those people, dangerous debts increase stress. Since money problems are the number one relationship killer, it is important to know which debts are particularly dangerous.
Dangerous Debts Increase Stress
Not all debt is bad. In fact, having some debt can be good for your financial profile and credit score. However, there is a fine line between good debt and bad debt. The worst type of debt is credit card debt.
This may seem like an odd concept, but think about it. Credit card debt is a type of revolving debt. Unlike other sources of credit, the amount you can borrow keeps going after you pay it down. With a traditional loan you would need to reapply and get approved to borrow more after repayment. A credit card keeps your borrowing window open. This leaves room for overuse of the credit.
As you pay down your balance your available credit increases. It is a debt trap. Proper money management can be difficult enough. The revolving debt cycle increases the chances someone sees the available credit as an opportunity. The cycle repeats and many people never stop the cycle. Similarly, the stress caused by the cycle continues and people grow into a feeling of hopelessness.
Debt Solutions To Stop The Cycle
On the bright side of credit card debt is that it is unsecured. That means it is not tied to any asset or collateral, which makes it easy to eliminate. There are a few ways to get rid of credit card debt. First, a traditional debt management strategy like the "snowball method". Pay as much above minimum as you can until you pay off the balance and then close the account. If you are experiencing more serious debt management problems you can eliminate your credit cards in bankruptcy. Bankruptcy lawyers in Sacramento can review your debt relief options both with and without bankruptcy.