Consumers in Arizona and throughout the country carry more credit card debt than ever. According to a recent GoBankingRates survey, consumers now have, on average, about $7,000 charged to credit cards. Of course, credit cards themselves are not necessarily the problem. In fact, if used correctly, credit cards can help Arizona consumers build good credit scores. However, when consumers abuse credit to overspent, this often leads to heavy debt, missed payments, and credit score damage. While experts are glad that consumer confidence is up, some worry that credit card spending is too high. Depending on how Arizona credit card users manage their card use, they may want to cut back to avoid problems. If it turns out that they are spending unnecessarily, consumers should consider changing their habits.
Possible Reasons Behind the Heavy Credit Card Debt in Arizona
Here are some possible reasons why credit card debt in Arizona is so high right now, as well as a few tips for consumers who want to bring down heavy balances.
Consumers are using credit cards more frequently to earn rewards.
Credit card companies are increasingly competitive with each other. This means that issuers now offer better and more enticing rewards programs in order to win over customers. Of course, most Arizona card users enjoy earning points, air miles, and cash back. Yet, if you’re spending more just to rack up rewards, these perks may lead to debt and credit score damage.
Honestly, unless you’re paying your credit card balance in full every month, you may not actually benefit from rewards programs. This is especially true if you roll over high credit card balances from month to month. Unfortunately, for a lot of Arizona consumers, interest charges on credit card debt eat away at money saved through earned rewards. Therefore, you should sit down and do the math if you are unsure about whether or not your credit card rewards program makes sense with your spending.
A sudden job loss makes consumers turn to credit cards for necessities.
Not every Arizona resident with sky-high credit card debt lives beyond their means or accidentally overspends to rack up reward points. Unfortunately, sudden job loss often leads to credit card reliance. If this happens, everyday expenses cause debt to grow, and interest charges to add up. Eventually, some consumers in Arizona faced with this situation struggle just to keep up with minimum payments. Potentially, they may end up spending years paying off this “crisis credit card debt.”
Sadly, if Arizona credit card users who use their cards to cover expenses during unemployment fall behind too much, they may default and ruin their credit scores. This makes it difficult for them to get loans or new credit in the future. Also, if their credit scores sink low enough, their car insurance premiums might increase – and this leads to more financial woes.
Many consumers in Arizona lack an emergency fund.
This issue is directly related to the previous possible reason for heavy credit card debt in Arizona. With a substantial emergency fund built up, Arizona consumers can handle things like job losses without relying entirely on credit cards.
Of course, this applies to other situations as well. For example, unexpected expenses like car repairs and medical bills can cause consumers to turn to credit cards if they don’t have saved cash. Another thing to remember, is that if you are currently paying high credit card balances down, an emergency fund is necessary. After all, you don’t want one financial emergency to undo all of your hard work. So, always leave enough money in your budget to set aside for savings.
In addition, all credit card users in Arizona should check their credit reports on a regular basis. Those paying down balances and working to improve their credit scores should pay extra close attention to their credit reports. This is because there is a good chance that your credit reports contain errors of some type. Unfortunately, creditors and the credit bureaus frequently mishandle consumer information, and these mistakes lead to credit report errors that can bring down credit scores.
How Arizona Consumers Can Protect their Credit Scores by Checking their Credit Reports for Errors
Luckily, there are federal statutes in place to help Arizona consumers protect their credit reports and credit scores. For example, the Fair Credit Reporting Act (FCRA) entitles all consumers to accurate credit reports. Also, the Fair and Accurate Credit Transactions Act (FACTA) allows you to request free copies of your credit reports from each of the three major credit bureaus once every 12 months. You can get all three of your credit reports at once by visiting www.annualcreditreport.com.
Once you have access to your credit reports, review them carefully for mistakes and errors. Then, if you find inaccurate information, contact Credit Repair Lawyers of America in Arizona. Instead of trying to handle the disputing process on your own, let the credit pros at our firm handle the entire process for you. When you call or fill out the online form on our website, an experienced credit attorney will do whatever it takes to get you clean credit reports – legally and for FREE. Even if we need to file a lawsuit on your behalf to get errors off your credit reports, you never pay anything out of pocket for our services.
How Arizonians can Get a Free Credit Repair Lawyer
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (480) 771-6001 or contact us on our contact page.
For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/arizona/credit-repair/.