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Credit card debt with large balances

Some South Carolina residents know that having credit is sometimes necessary. This is dependent on one's income and largely on the type and amount of debt. Several parameters make a considerable difference when lenders decide whether credit is extended.

One factor is an individual's credit utilization or the portion of available credit the individual uses. For instance, if a credit card has an upper limit of $5,000, and the charges on that card amount to $2,500, that individual is using 50 percent of the limit. This is much higher than the 30 percent most lenders like it to be.

A common misconception, particularly among the younger generation, is that debt on a credit card is a good way to build credit. However, to build credit, the balance must be paid off and not retained. When the balance is paid, lenders will see that as favorable. Using too much credit and paying the minimum amount makes it less likely a loan will be forthcoming.

Another factor is an individual's payment history. If payments are made on time, this reflects well on the debtor and his or her credit score might reflect that. In fact, making payments on time builds one's credit worthiness, and the score rises.

Credit card debt has increased in the past year, and the average amount held on a credit card is about $5,234. However, in the same amount of time, the total number of credit card holders has dropped.

On occasion, credit card debt becomes overwhelming. It may be beneficial to speak with an attorney to see if Chapter 7 bankruptcy may be possible. If so, the attorney may help the individual file and be able to discharge such debt in order for the debtor to start over.

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The Huggins Law Firm, PA

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1812 Lincoln Street
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Columbia, SC 29201

Phone: 803-764-1558
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