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I didn't spend much, where did this credit card debt come from?

Unfortunately, credit card debt might just be as American as apple pie. Of course a small amount of debt is something that most people in Washington are familiar with, but those small debts often balloon with seemingly no notice or reason. Credit card debt in particular can expand rapidly, putting consumers in compromising financial positions with no way out.

Unimaginable amounts of credit card debt are often blamed on lazy or irresponsible consumers, but just how accurate is this thought? Credit card companies are masters of drawing in customers that they can then trap into long-term payments that typically far exceed what a person originally owed. Take the lucrative offer of deferred interest. Many companies offer new customers the opportunity to sign up for an introductory period during which they can pay 0 percent interest. If the original balance is not paid off by the end of that introductory period, then the consumer is on the line for retroactive interest on the original balance, a footnote that often is not explained when bringing in new members.

Credit card companies also act in less sneaky fashion, for instance by simply jacking up interest rates. While the 2009 Credit Card Accountability Responsibility and Disclosure Act was supposed to prevent this, there are still instances in which credit card companies hike up those rates as quickly as they can. Being 60 days late on a payment often nets harsh penalties that can increase interest rates to nearly 30 percent! Not exactly ideal for consumers who are already struggling with repaying a debt.

It might be popular to blame consumers for mountains of impossible credit card debt, but doing so does not take into account the reality of how credit card companies work. For every offer of airline miles, cash back or 0 percent interest, there is another actuality hiding just behind it that can strip an individual of financial stability in the blink of an eye. Instead of laboring under this invisible burden as the balance only grows, most Washington consumers can achieve some level of debt relief after filing for bankruptcy. Although creditors might warn that this action will do nothing, the beginning of the process can effectively stop harassing calls and letters and allow individuals to move forward with a more financially healthy life.

Source: twocents.lifehacker.com, "All the Ways Credit Card Companies Try to Screw You Over", Kristin Wong, Jan. 27, 2016

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