Maxed-Out Credit Cards? Your Financial Circumstances May Be Worse than You Think

There are several reasons why credit card holders may want to strategically spend their maximum available funds. Perhaps you want to take advantage of a 0% balance transfer option. Maybe you want to make a large purchase and simultaneously benefit from your card’s rewards. However, reaching your spending limit either accidentally or due to a sudden loss of other available funds is an entirely different story.

Reaching the limit of a credit card’s balance might not seem like the end of the world, but if you’re not careful, that landmark may have far-reaching effects on your financial stability. Here are some of the reasons why you should try to avoid maxing-out your credit cards.

You may compromise your credit score.

When you use all of your available credit without immediately paying off the balance, that activity is reported to credit agencies, which do not look kindly upon using abundant credit. The credit score will diminish further if you make late payments.

The longer you carry the debt, the more expensive it becomes.

This is especially true if you reach your credit limit on a 0% APR balance transfer card and do not pay it off by the end of the promotional period. There may also be additional fees and penalties which could start to mount up – possibly causing you to exceed your credit limit. The longer you keep the debt, the more money you will ultimately owe, making it increasingly difficult to pay off if you find yourself in reduced financial circumstances.

You make yourself less attractive to other lenders.

With a maxed-out credit card, you may fail to qualify for low-interest loans, or may be denied loans outright. It signals to lenders that your debts are beyond your control.

Americor Financial: Giving borrowers lending and debt management options that can help restore financial stability.

If you have reached or exceeded your credit limit, Americor Financial can help you regain control of your finances through low-cost, personalized lending and debt consolidation solutions. If you want more information about Americor Financial debt management strategies, please contact the Americor Financial team today for a consultation.

Credit Card Trends for the End of 2018

Interest rates are rising, and this has been – and will continue to be – the biggest influencer of credit card activity for the coming year. Here are a few credit card trend predictions our industry experts are making for the remaining fiscal quarters.

Mobile payments will outpace direct credit card use.

Mobile payments – the use of a banking app on a smartphone or tablet to pay for goods and services in-store – are becoming increasingly common, and may become ubiquitous by the end of 2018. Previous concerns, namely about security, are being addressed as providers adopt effective measures to prevent fraud and identity theft.

Issuers will offer customized rewards programs.

Rewards programs – like the American Express Uber credit, Capital One’s Spotify Premium subscription deal, and Discover’s in-flight WiFi credit – are being tailored to user lifestyles, making benefits more tangible to the Millennial and Post-Millennial generation.

Delinquencies will increase.

The increasing cost of maintaining a credit card balance combined with relaxed credit availability will lead to an increase in delinquencies. While the delinquent rate won’t reach the highs seen during the Great Recession, past-due balances are predicted to rise to nearly 2 percent.

Credit card debt can be an oppressive burden, but Americor Financial offers debt consolidation solutions that will give you control of your finances, and your future.

Paying the Minimum Amount on Your Credit Cards Just Won’t Work, and Here’s Why

If you’ve amassed significant credit card debt, you may be tempted to only pay the minimum amount of your monthly bill – particularly if you are struggling financially. However, if your goal is to resolve your outstanding debts within a reasonable time frame, here is why paying the minimum is doing you more harm than good.

Paying the minimum only pays the interest, not the principle.

If your credit card issuer requires a minimum payment of 1 percent of the monthly balance each month, but annual your interest rate is 21 percent, that means that your monthly interest rate is 1.75 percent. That’s right – your interest rate continues to accrue when you pay the minimum balance, and month after month, you’ll find your total debt obligation actually increasing, not decreasing.

Paying the minimum hurts your credit utilization.

Your credit card debt – even if your making those monthly minimum payments on time – is one of the factors that influences your credit score. When you’re using your maximum credit limit and only paying the minimum, that balance can diminish your credit.

Americor Financial offers credit counseling services that can help your resolve your debt.

Americor Financial provides a variety of financial services that can help you manage your debt and meet your repayment goals. To learn how you can pay off your debt quickly, visit Americor Financial for more information.