12 Real Costs of High Debt

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Here’s a graph showing how credit card debt can grow over time due to interest, turning a small balance into a fortune. It demonstrates the power of compound interest and why it’s important to manage credit card debt wisely.

Compound interest on credit cards is how unpaid balances grow over time, making your debt more expensive the longer it takes to pay off. Here’s how it works:

1. Daily or Monthly Interest: Credit cards usually calculate interest daily or monthly, based on your annual percentage rate (APR). If your APR is 18%, the daily interest rate is about 0.05% (18% ÷ 365 days).
2. Adding Interest to the Balance: If you don’t pay your balance in full by the due date, the credit card company charges interest on your remaining balance. This added interest becomes part of your balance for the next billing cycle.
3. Interest on Interest: Here’s where it compounds. In the next billing cycle, the credit card applies interest not just to the original balance but also to the interest that was added. Over time, this snowballs, making the total amount you owe grow faster.

Bad credit can make everything more expensive and lead to missed opportunities, affecting everything from housing to jobs, and even health. For those struggling with debt, Bankruptcy in Raleigh, NC could be a smart way to get back on track and break the cycle of financial stress. Here’s a closer look at the true cost of bad credit, plus how filing for bankruptcy can provide financial relief and a fresh start.

How Bad Credit Costs You Money (and How Bankruptcy Can Help!)

High-Interest Rates on Loans and Credit Cards

• • Why It Hurts: Bad credit means lenders see you as a risk, so they charge higher interest. This adds up, especially with credit cards and loans for big purchases like a car or house.
  • Average Cost: A $10,000 loan at a higher rate could cost $5,000 to $7,500 more in interest over five years! If you make only the minimum payments on a $10,000 credit card balance at 29% interest over 20 years, you would pay approximately $82,207 in total, and after 20 years, you would still have a remaining balance of about $27,126.
  • How Bankruptcy in Raleigh, NC Can Help: Filing bankruptcy with Cameron Bankruptcy Law can wipe out high-interest debt, freeing up income and helping you qualify for lower interest rates.

Getting Approved for Loans or Credit Cards With Bad Credit

• • Why It Hurts: Low credit scores make it harder to get approved for loans or credit cards. People with bad credit often have to rely on costly payday loans in emergencies.
  • Average Cost: Each payday loan can rack up to $1,000 in fees per loan cycle!
  • How Bankruptcy in Raleigh, NC Can Help: Bankruptcy with Cameron Bankruptcy Law clears old debt, improving your credit-to-debt ratio so you’re more likely to qualify for affordable credit in the future.

Higher Costs to Rent Apartments

• • Why It Hurts: Landlords generally check credit scores. With bad credit, you might needa larger deposit, or worse, might be turned down for housing. They can also raise your rent due to bad credit.
  • Average Cost: Higher deposits can cost an extra $3,000 to $4,500 upfront on a $1,500 per month rental.
  • How Bankruptcy in Raleigh, NC Can Help: Bankruptcy with Cameron Bankruptcy Law improves your credit over time, helping you avoid extra fees and get better rental options.
    

Average Mortgage Rates According to Credit Score

Here’s a graph showing how mortgage interest rates typically rise with lower credit scores. As credit scores drop, the rates increase sharply, reflecting higher lending risk. The dashed lines highlight thresholds for “low” (580) and “good” (700) credit scores.

• • Why It Hurts: Low credit scores lead to higher mortgage rates, making home ownership much more expensive over the long term. If your credit is too bad you will get turned down!
  • Average Cost: For a $200,000 mortgage, paying a higher interest rate could mean $80,000 to $100,000 more than someone with good credit over the life of the loan.
  • How Bankruptcy in Raleigh, NC Can Help: Filing bankruptcy with Cameron Bankruptcy Law can improve your credit, so you’re more likely to qualify for a lower mortgage rate.

Higher Car Loan Costs

• • Why It Hurts: Bad credit impacts car loans too, leading to higher monthly payments and even fewer financing options.
  • Average Cost: Paying a higher interest rate on a car loan could cost an extra $10,000 to $15,000 over 20 years for multiple cars.
  • Bad credit can also force you to buy cars for even twice what they are worth form car lots!
  • How Bankruptcy in Raleigh, NC Can Help: Bankruptcy with Cameron Bankruptcy Law can reduce debt and improve credit, helping you qualify for lower car loan rates.

Increased Insurance Premiums

• • Why It Hurts: Insurance companies sometimes charge higher premiums for people with poor credit scores.
  • Average Cost: Higher premiums could cost $240 to $600 more per year, adding up to $4,800 to $12,000 over 20 years.
  • How Bankruptcy in Raleigh, NC Can Help: With Cameron Bankruptcy Law you can have improved credit post-bankruptcy can lower your insurance premiums, saving you money every month.

Limited Job Opportunities Due to Poor Credit

• • Why It Hurts: Many employers check credit scores as part of the hiring process, especially in finance or security sectors. Low scores may hurt or eliminate your chances of getting the job.
  • Average Cost: Missing out on higher-paying jobs could cost $10,000 to $60,000 per year, or $200,000 to $1,200,00,000 over 20 years.
  • How Bankruptcy in Raleigh, NC Can Help: By filing bankruptcy with Cameron Bankruptcy Law and improving your credit, you can access better job opportunities and grow your income.

Extra Deposits for Utilities and Services

• • Why It Hurts: Utility companies often require larger deposits from those with low credit scores.
  • Average Cost: Extra deposits for essential services could add up to $900 to $1,500 each time you move.
  • How Bankruptcy in Raleigh, NC Can Help: Filing bankruptcy with Cameron Bankruptcy Law can improve credit scores, making it easier and cheaper to set up utilities.

Harder to Start a Business

• • Why It Hurts: Bad credit can prevent you from getting business loans, which limits your ability to start or grow a business.
  • Average Cost: Missing the chance to start a business could mean $50,000 to $100,000 in lost income over several years.
  • How Bankruptcy in Raleigh, NC Can Help: Bankruptcy clears debt, improving your credit and opening doors for future business funding.

Limited Financial Safety Net

• • Why It Hurts: Bad credit means fewer options for borrowing in emergencies, which can lead to costly payday loans or debt.
  • Average Cost: High-fee loans could cost $20,000 to $60,000 over 20 years.
  • How Bankruptcy in Raleigh, NC Can Help: Bankruptcy, with Cameron Bankruptcy Law, can give you a fresh start, allowing you to save for emergencies rather than relying on costly credit.

Debt Consolidation Costs

• • Why It Hurts: Higher rates on consolidation loans mean more money spent on interest, even if you’re trying to manage debt.
  • Average Cost: High consolidation rates could cost $5,000 extra over five years.
  • How Bankruptcy in Raleigh, NC Can Help: Bankruptcy helps clear or reduce debts, eliminating the need for high-interest debt consolidation.

Health Issues from Financial Stress

• • Why It Hurts: Financial stress can lead to health issues, like anxiety and heart disease, increasing medical costs.
  • Average Cost: This stress can easily add $20,000 to $60,000 in healthcare costs over 20 years.
  • How Bankruptcy in Raleigh, NC Can Help: Reducing debt through bankruptcy can relieve stress, improving health and productivity. Cameron Bankruptcy Law can help.

Limited Travel and Moving Options

• • Why It Hurts: Bad credit can make it hard to rent a car, book hotels, or relocate, adding extra costs and restrictions.
  • Average Cost: These limitations can add $10,000 to $30,000 in fees and lost opportunities over 20 years.
  • How Bankruptcy in Raleigh, NC Can Help: Bankruptcy can improve credit, giving you more travel and relocation freedom.

Difficulty Improving Credit Without Help

• • Why It Hurts: Bad credit can be tough to break without affordable credit tools or guidance.
  • Average Cost: Difficulty improving credit can cost $10,000 or more in lost opportunities.
  • How Bankruptcy in Raleigh, NC Can Help: Bankruptcy resets your finances, making it easier to start fresh and build positive credit.
    

Total Potential Average Loss from Bad Credit:

800K for a Single Person Over 20 Years

Bankruptcy in Raleigh, NC Could be the Right Move

Bad credit costs more than you might think. Bankruptcy in Raleigh, NC could be the first step toward a brighter financial future. It allows you to reset your finances, eliminate high-interest debt, and improve your credit score, helping you save money on everything from interest rates to job opportunities. At Cameron Bankruptcy Law, we’re here to help you understand your options and guide you toward financial freedom. Don’t wait to make the change—reach out to explore how bankruptcy can put you on a path to financial security!

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Sheree & Kerry Cameron
Cameron Bankruptcy Law
https://CameronBankruptcyLaw.com
(919) 627-7748
sheree@CameronBK.com
Our Reviews: http://CameronBankruptcyLawReviews.com

Call Kerry Now! (919) 627-7748

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