Overview
Credit card debt, overspending and a lack of savings are exhausting Wendy's finances.
She has $16,700 spread
over four cards and $410 on an overdraft loan
at 14 percent interest. Her debt load includes
a mix of cash advances, balance transfers
and purchases, which create multiple balances
and APRs on some of the cards. While one of
these balances is at a low interest rate of
3.99 percent, other rates range from 13 percent
to 24 percent. She has tried to transfer balances
to low-rate cards before but has then run
up the balances on her cards again. If she
does transfer balances again, she wants to
close out the other cards to avoid the risk
of repeating that mistake.
Perhaps most telling about these various credit cards debts is that Wendy has no idea how she incurred many of them. A balance of $3,635 on one card comes from a Caribbean cruise in the summer of 2005. Other debts are at least that old, and she has no recollection about why the cash advances were needed.
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This report was prepared by Bankrate Senior Financial Analyst, Greg McBride, CFA. |
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