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Don't get swept up in credit card trends and rewards

If you are like 171 million other Americans, you have at least one credit card. In fact, chances are that you have at least a couple credit cards you use. According to recent reports, the number of credit cards accounts is growing quickly, and people are carrying higher balances on these cards than in recent years.

In other words, credit card use is booming, thanks in large part to an improved economy. And creditors are taking advantage of this environment by making their cards more attractive to consumers. However, before you decide to capitalize on these opportunities, take a step back and consider a few things.

  1. Do you have existing credit card debt? If so, how much are you carrying? Are you able to pay more than the minimum balance every month, and are you paying your bill on time every month? If not, then adding a new credit card to the mix, no matter how good the rewards seem, may not be wise.
  2. What happens once introductory rates and offers end? Sign up bonuses and low annual percentage rates can seem incredibly attractive. However, make sure you know what happens at the close of those introductory offers. Otherwise, you could get stuck with huge interest rates that you can't afford.
  3. What does your credit rating look like? If you have a strong credit rating, then the risks of opening a credit card can be relatively low. However, if you have poor credit, you can be considered a subprime borrower. You can still get a credit card, but you will typically have a much higher interest rate than other borrowers.

Taking these and other factors into consideration before opening a credit card can help you avoid some costly mistakes.

With all this being said, understand that credit card debt can accumulate much more quickly than people expect. One missed payment can quickly spiral into delinquency and massive penalties that become unmanageable.

Should you find yourself buried in credit card debt, it is important that you not ignore it or hide from it; debt will not go away on its own. Instead, it can be wise to consult an attorney to discuss the various debt relief options that may be available to you.

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Rothschild & Ausbrooks, PLLC
1222 16th Avenue South, Suite 12
Nashville, TN 37212

Toll Free: 866-656-8909
Phone: 615-866-2265
Fax: 615-242-2003
Nashville Bankruptcy Office