KNOXVILLE (WATE) - Although credit cards offer many conveniences, they can create many problems when they become hard to control.
Americans owe more than $800 billion in credit card debt, according to a report from Equifax. The average household has more than $16,000 in debt.
Certified financial planner John Fawaz presented some tips Tuesday morning on Good Morning Tennessee on what to do when credit cards become a problem.
Many people have problems paying off the debt because it compounds over time. If you have $10,000 in credit card bills you can expect to pay $10,000 in interest in just four years if you don't pay down the principle.
Fawaz says it is sometimes possible to ask credit card companies for a lower interest rate to help you make payments. If your credit card company won't do that for you, shop around for another company.
When debt builds up too large to handle, you may be able to lower the interest rate and spread out payments by paying off the debt through a home equity loan. The key here is to use discipline and not add more credit card debt on top of it.
Of course, the best practice to handle rising debt is to stop using your credit cards. Don't add to the problem while you're trying to get it under control.
John Fawaz is president of Financial Partners of TN, LLC.
Certified financial planner John Fawaz presented some tips Tuesday morning on Good Morning Tennessee.
