As interest rates rise, more and more people are turning to their credit cards when they are having trouble paying their bills.
But people who use credit cards are finding out that debt leads to more debt as they try to make their payments. Over 4 million payments were late in the first half of this year, which led to fines of more than GBP50,000,000.
Some people don't realise how far-reaching these missed payments are, since they can hurt a person's credit score for up to three years. In turn, this makes it hard for these people to borrow money or get loans, and they may have to pay much higher interest rates because lenders see them as high-risk borrowers.
Unfortunately, this system, which was made to give people a way to live better than they can afford right now, can have the exact opposite effect if it is not carefully managed. Many people who can't make payments or pay fines are now stuck in a spiral of debt from which they can't see a way out.
But there are some people who use remortgaging as a way to get out of debt, combine all of their monthly payments, and fix the bad effects on their credit scores.
A mortgage broker who specialises in helping people with bad credit refinance can find a mortgage product that fits your ability to make payments. These payment plans are made to fit the financial situation of each homeowner, and they sometimes include "repayment holidays."
This way, money sitting in real estate can be used right away to pay off growing debts, like those from missed credit card payments. This can help stop the cycle of debt and fix a bad credit score caused by bad money management.
It looks like there may be a serious competitor to the credit card when it comes to getting money quickly when you don't have enough.
