The credit card debt is almost always referred to as the second worst debt you will ever get into. Most of the credit cards will charge 2-3 percent interest per month on advance purchase using this credit facility. The figures 2-3 percent may appear real small but if done on a monthly scale this spells out 24-36% per year interest, you can easily double the amount payable in 3 years. What may not be known to most people are the compounded interests that are accrued if credit card bills remain unpaid with the interests, meaning you get charged with interest on your current interest. The other phenomenon is the minimum payable due in the credit card billing statement, this is the minimum amount required for you to pay to update your account.
It is usually 5% of the total amount borrowed. If the minimum amount is paid and updated, this leaves the 95% billing plus the monthly interest subject to another cycle of compound interest. This will practically be charging interests with interest on top of interest. You should know that the credit card industry is a multi-billion dollar industry in USA today.Not all credit card debts are bad. If credit is done to purchase a salable item for profit while short on cash, this methodology is quite handy especially if payment is done before the cut-off date of the interest due.
Using this credit facility to do business is quite effective especially if you closely monitor the month end interest due dates.There are bailing out options from heavy credit card debts may be offered by competing credit card companies to lure clients to transfer to their service, this facility is a secondary mortgage. Second mortgages are offered with very low interests to attract the creditor to buy off all his payables from the original company. Banks may also offer loans for people with bad credit standing to allay his current business debt crisis.