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5 effects of credit card debt

Americans are using credit cards more than ever before. This widespread use has several effects, including normalization of using credit to pay for anything from a larger purchase such as a mattress to a purchase as small as a cup of coffee.

This may not be a problem if you are one of the people in the minority who pay your credit cards in full every month. You may be reaping the benefits of various reward programs for airline miles, bookstore gift cards or even cash back. But for the majority of people, credit card debt gets carried forward and accumulates into a larger problem.

According to an article in Time Magazine, the reason widespread credit card use continues to be a problem is because of the ease and availability of obtaining credit. This ease makes it simply too hard to say no to opening and using credit cards as a means of payment. And of those people using credit cards, 65% are carrying balances forward rather than paying the credit cards off each month.

This can have several effects, including:

Increased stress -- Having debt on your mind creates extra stress in your life.

Higher cost of goods and services - When you charge a purchase and don't pay it off right away, the credit card company adds interest each month. This interest, in essence, adds to the actual cost of whatever you purchased over time.

Family problems - Money issues add extra stress to family finances, which can sometimes lead to divorce, mortgage foreclosure and other issues.

Lower credit score - Not making payments on credit cards and having other unresolved debt can negatively impact your credit score.

Money management difficulties - Having several credit cards to keep track of creates multiple minimum balances to pay each month, which could create a situation where you can't afford to pay the minimums each month. This can be much more problematic than just having one credit card to manage.

How do you keep your credit cards in check?

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Joshua Z. Goldblum, Attorney at Law
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