Saving money may tackle credit card debt
Credit card debt can be induced by any number of financial follies, from missed payments to defaulted loans.
However, a new report suggests saving money may help consumers ease burdens brought on by credit card debt.
Consumers who do not have sufficient savings in place may have to rely on credit for costly expenses. This may lead to overwhelming debt, which can lower a credit score and make it more challenging for a person to obtain loans in the future, according to The Detroit News.
“Saving money is not optional” says Steve Bucci, a personal finance coach. “If you want to be successful today, you can’t just save what’s left over at the end of a pay cycle.”
Bucci cites car accidents, mechanical repairs and illnesses as reasons for his belief in increased consumer saving. He recommends that consumers keep six months of expenses in an emergency account, the news source reports.
Consumers should also be aware of the statute of limitations in their state. The common legal law sets a maximum length of time that legal proceedings can begin after an infraction, which can be useful in negotiating credit card debts, according to The Detroit News.
The U.S. savings rate is currently at its highest point since 2009, jumping to 6.4 percent in June 2010, according to the Commerce Department.