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Credit Card Debt Incurred Over Holidays Can Have Lasting Effects

Law Office of Ronald V. De Caprio Dec. 17, 2015

It can be difficult for New York shoppers to reign in their holiday purchases. With tempting deals that start as early as the week of Thanksgiving, the holiday buying season is long and sometimes hard to pass up. However, as many shoppers put their gift purchases on credit cards, some face difficult realities when their credit card bills arrive with balances that they cannot pay off.

High credit card balances can mean problems for consumers for many reasons. Particularly, when an individual is unable to pay off the full amount of his credit card bill, he will likely incur interest on his outstanding balance. When a person can only make minimum payments toward that balance, the amount that he must pay in interest can be exorbitant.

Also, consumers can see their credit scores decrease due to their holiday shopping practices. For example, when a person’s credit balance is high relative to his total available credit, he can look like a greater credit risk to lenders than someone whose balance to credit availability level is lower. The level of risk that an individual possesses with regard to her ability to pay off credit can affect her other financial interests, such as premiums on his insurance.

Experts recommend that shoppers only buy what they can afford to purchase with cash. However, due to the convenience of shopping on credit cards, many individuals will shop beyond the financial capacity that they are able to pay off. Problems with credit card debt can manifest as bigger financial burdens for consumers, and those who cannot overcome their economic burdens can always seek out debt relief options from attorneys who work in the bankruptcy and debt relief fields.