The Frightening Risks of Credit Card Debt - Debt Academy

The Frightening Risks of Credit Card Debt

The Frightening Risks of Credit Card Debt

It seems like in this age of email and digital messaging, the only people sending mail through your mailbox anymore are credit card companies.

Every other day, it’s a new offer, promising a better interest rate, more rewards, and exciting new terms. It can be tempting. After all, credit card companies have whole teams working to make their card seem as attractive as possible.

And it makes sense. The most common type of personal debt in America is credit card debt. It’s nearly universal.

But before you send off that “easy application” (enclosed and postage-paid!), wait a minute. Do you really need a credit card?

Credit cards can help you build your credit, it’s true. But they come with a host of other risks. People end up in credit counseling every day because of the pitfalls of credit card debt.

So before you apply for the new, triple platinum, mega-rewards, quadruple-miles credit card, let’s take a look at some of the risks of credit card debt.

Racking up Personal Debt

Having a credit card can feel free. Don’t have cash? No problem! You have a magic piece of plastic that just gives you FREE MONEY!

That’s how it can feel. It’s difficult in the moment to remember that the bill comes due at the end of the month and that forgetfulness leads to spending more than you can realistically pay back.

It’s also easy to overestimate how much you can pay back. After all, $200 on a credit card feels like a lot less money when it isn’t staring at you from a bill.

To avoid spending too much on your credit cards, take stock of exactly what you can afford to spend on your credit card bill each month, and commit to spending no more than that amount, no exceptions. You can also use the credit card as an emergency-only card, and store it away so it can’t be used for frivolous spending.

Or, better yet, don’t get the credit card at all. After all, no credit card = no credit card debt.

Predatory Interest Rates

When you get a credit card offer, something a surprising amount of people overlook is the little number, usually hidden away in the small print, labeled “APR”

The Annual Percentage Rate is the interest you’ll be paying on any credit not paid off at the end of the month.

Rates can edge closer to 30%, and if you’re like almost half of Americans and carry a balance, you can end up paying hundreds more than you actually owe.

Confusing Terms

Something credit card companies love to do is hide little caveats and fees in the small print.

Remember, credit card companies make their money off your personal debt, so it is in their best interest to throw in as many money making machines as they can, preferably without you realizing how much it is costing you.

From introductory interest rates that jump after six months to annual fees, those little things can add up. And while some credit card companies are finding themselves in hot water for such predatory practices, many are still using the small print and legal jargon to their advantage.

They bank on the fact that you won’t take the time to really read over your credit card agreement and terms, and that you won’t fully understand it even if you do. So do your research and make sure you aren’t getting taken advantage of.

Stolen Information

Any credit card company, no matter how good their security, is vulnerable to fraud.

Malicious hackers can steal the credit card information and rack up thousands in debt. Now, most companies do have protections in place in case of fraud.

But this kind of theft can still result in hundreds of dollars in lost credit, as well as the hours spent proving the fraud and going back and forth with your creditor so that your money can be reimbursed.

And if your credit card doesn’t have fraud protection, you are left holding the bill, which can tank your finances and your credit score.

credit card debt

Credit Card Debt = Tanked Credit Score

There is no way around it. Used incorrectly, a credit card can absolutely devastate your credit score.

If you carry too great a balance, miss payments, or worse, default on your credit card, your score can suffer in ways that can take years to fully repair.

And while credit counseling is available if you need it, you would probably rather just avoid the trouble altogether and keep your score high, to begin with.

You can avoid the credit score problems a few ways.

  • Carry a low balance or none at all
  • Pay off your card every month
  • Make your payments on time or early
  • Don’t have a credit card at all

Avoid Credit Counseling

If you want to avoid these pitfalls, it may be best to avoid a credit card altogether.

But if you simply have to have one, for one reason or another, make sure to keep an eye out for these risks.

If you’ve already fallen victim to the risks of credit card debt or need help learning how to pay off credit card debt, contact us. We’d love to find a solution that’s right for you.


  1. […] you’ve paid off your credit card debt, you’ll feel a weight lifted off your shoulders. You did it! Revel in the […]

  2. Debt Academy Credit card Relief says:

    A very honest point of view, i have been compelled to completely agree word to word. In the guise of enhancing the credit scores the individuals get trapped. i have a very genuine advice for all the credit card holders that in case they are trapped and heavy interest payments have made it impossible for them to repay the loan. They must seek help of the expertise through their credit card relief program.

  3. Debt Academy credit card relief programs says:

    One must be very cautious at the time of making a credit card purchase to avoid get into troubles later on. There is saying that means sta with in limits. This saying applies tou spending spree that we might indulge sometimes into it in the later part of our lives, thinking that a credit card we use or would use may come to financially rescue us is a myth. When the life is on credit it generally suggests that we should act wisely and incase someone gets trapped into a credit card debt, he must seek the help of credit card relief program. There is this good assessment of the credit card companies and it is related to these cards being a source of earnings for these companies. So many credit card holders imply that they have many sources of income.

  4. […] Recognizing these habits could save you a lot of money and stress at a later stage, as per the credit relief programs. For the purpose of creation of more debt and paying off the debt. You are having, you need to […]

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