Many people experience depression around the holidays, trying to live up to some impossible standard of perfection of decorating, gift-giving and preparing holiday meals that is just not possible to achieve. Still others suffer from the post-holiday blues when the credit card bills start rolling in.
Kentucky is not one of the states with one of the highest credit card debt in the country, but many people who live there may carry credit card debt. In all, people in the United States have $3.4 trillion in consumer debt, and $929 billion of that is revolving debt. Around 38 percent of all households carry credit card debt with a mean of about $5,700.
Many Kentucky residents realize that while credit cards can be very helpful, they also carry a number of downsides. Although they can help people deal with unexpected emergencies, such as vehicle repairs or medical bills, most credit cards tend to carry high interest rates and can prevent people from being able to save for the future.
Many people in Kentucky use credit cards as a way of managing their personal finances. Unfortunately, common mistakes can have a catastrophic effect on a credit card user's financial situation.
A small business in Kentucky may deal with major swings in financial matters in the early years of activity, and a business credit card could be an important tool for making it through leaner times. However, a credit card can be mishandled, resulting in growing debt. In some cases, refinancing offers the ability to reorganize financial details so that they are more manageable. However, it is important to evaluate both positive and negative factors before refinancing.
While debt is often common and necessary for those going to school, opening a business or buying a home, debt can accumulate quickly and become harder to pay off than one anticipated. Important aspects of paying down debt seem to be persistence and making continual progress, and Kentucky residents might be able to follow a few tips to get rid of lingering financial obligations.
The average consumer in the United States has a FICO score of 695. However, the average millennial has a FICO score of 670, and part of the reason for this is their propensity to apply for credit cards that they cannot obtain. Another mistake is their propensity to apply for credit cards too often. Ideally, an individual will wait at least six to 12 months between applications.
One very popular method that Kentucky consumers use to pay off debt is called the snowball strategy, where they start with the smallest debts and pay them off. As smaller debts are paid off, individuals then move on to larger obligations. The reason this tends to work is that when people feel they are making progress or have achieved a goal, even a small one, they are likely to keep working towards a larger goal.
Consumer debt is a major problem for many people in Kentucky and across the U.S. From unemployment to using credit cards for too many expenses, debt can accrue for a number of reasons. There are also less obvious issues that can cause debtors to struggle. An example is an interest rate increase from the U.S. Federal Reserve.
According to regulators, Citibank agreed on July 21 to pay $700 million to customers and another $70 million in fines related to deceptive credit card practices. The Consumer Financial Protection Bureau said that 8.8 million customers were billed for add-on services such as debt protection and credit monitoring. Cardholders in Kentucky and elsewhere were told that these services were free for 30 days or were charged for services that they never received.