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Reasons Many People Stay in Debt

Why People Stay in DebtDebts are sometimes inevitable in life. For most people, it would be next to impossible to own a home, a car, pay bills or even get an education without credit. Federal Bank of New York released a report that put household debt and credit at $13.29 trillion in the second quarter of 2018.

Do people end up repaying all these debts? Unfortunately no; many people are up to their necks in debt and quite a large number of them are doing nothing towards repayment. There are numerous reasons why many people stay in debt. Here are several:

Living Beyond Means

This simply means that you are spending more than you are bringing in. If what you are earning cannot comfortably cater for house and car payments, insurance, other fixed costs and house expenses, then you cannot afford that kind of a lifestyle. It is even worse if you freely use your credit cards to pay for what your income cannot support. What happens is that debts start accumulating and accruing interest month after month and before you know it, you are swimming in debt with no way to escape.

Spending Without a Budget

According to a recent study, only 41% Americans use a budget. This means that most people cannot track their spending habits leave alone plan for the future. Without a budget and with several credit cards at your disposal, it is easy to spend your money uncontrollably and end up depending on credit as you wait for the next pay. The repeated cycle leads to failed repayments which consequently increases the outstanding debts.

Job Loss or Reduced Income

Having a job gives you the confidence to use credit knowing that your income is able to cover the repayments. Should you unexpectedly lose the job, it becomes impossible to make your repayments which may also attract additional interests and penalty fees. Even if you end-up getting another job, it is possible that your credit card debts will have soared to levels that you may no longer sustain. Similarly, a pay-cut or reduced income may also make you lag behind on your repayments leading to accrued debts.

Unwillingness to Sacrifice

If you are deep in debt and you still fight to maintain the same life style, chances are that you will never repay your debts or worse still, they will keep increasing. The ability or inability to save for debt repayments may depend on your willingness to forego a few things like holidays, cable, birthday gifts, a big house and a luxurious car among others. The question is; are you willing to make the sacrifice?

Struggling to Keep up Appearances

It is just human nature to want to fit into certain statuses set by the society, family, friends etc. In an effort to fit, you may end up spending beyond what you can sustain with your income. Unfortunately, the demands may keep going higher and higher and unless you can tell yourself to stop, you will be up to your neck in debt within no time. The fact that you are keeping up appearances means that things are not good financially in the first place so unless you win a lottery or come into some huge cash, you will stay in debt for a long time.

Financial Illiteracy

In a quest to understand how financially literate the world is, people were asked 4 simple questions regarding risk, inflation and interest. Out of 150,000 adults from over 140 countries, only a third could answer 3 out of the 4 questions correctly. If you have no idea of how credit works, you keep on making mistakes that will increase your debts in the long run. Such include; late repayments, carelessly requesting for credit top-ups, and falling for the wrong lines of credit among others. This also comes with the inability to manage the credit hence leading to heaps upon heaps of debts.

Final Take

While it is normal for people to find themselves in debt at some point or another, not all of them end up paying. The reasons why many people stay in debt range from genuine ones to outright selfish ones. Debt accumulates little by little and before you know it, you are too debt ridden to do anything about it. On the other hand, with proper planning, a little sacrifice and commitment, it is possible to disentangle yourself from the debt cycle one step at a time.

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What an awesome team. They work hard and get things done. My credit has jumped amazingly and the coaching videos are very informative to every detail. Would recommend this company to anyone looking to better their credit.
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Steven Lasseson
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14:51 28 Feb 20
I've tried a few other credit repair companies and Credit Absolute has provided the best service I've come across. In just over a year, they were able to get numerous items removed from my credit report. The process is simple, the staff is easy to work with, and the results are everything you'd hope for. If you are looking for help in your journey to financial freedom, do yourself a favor and give Credit Absolute a call.
Kade Deeyor
Kade Deeyor
21:51 19 Feb 20
Credit Absolute has been a huge help for me. Since the beginning I’ve seen an enormous increase in my credit score. Felicia and Leslie are especially helpful, concise, and very informative. They both always get back to me within minutes if I have any questions or concerns. I would highly recommend Credit Absolute to anyone seeking a better understanding of how Credit Scores actually work or if you’re looking to increase your scores.
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Phuong Mai Pham
17:56 13 Feb 20
Credit absolute has helped me tremendously over the past few months. My scores for all 3 credit bureaus have increased by 50+ points. I appreciate the education on credit. I am now much more knowledgeable and strategic about when I should and should not use my credit cards. I look forward to my progress as my goal is to purchase a home by the end of the year!
Doug Donaldson
Doug Donaldson
06:13 21 Dec 19
I noticed a few changes on my credit report that had lowered my score which concerned me and after looking at reviews online I decided to set an appointment with Derek at Credit Absolute. I was fully expecting to spend hundreds of dollars for his advice on what I should do to get it back up to where I had it. After consulting with him and looking in depth at my report, he gave me some tips and helped me understand how the 3 bureaus work and what I could do to increase my score. Best of all..... he didn't charge me a penny. Derek is an honest guy, running an honest business, and if you are looking to build your credit score then he is the guy to turn to. It was about a year ago that I met with him and my score is up over 90 points. 10/10 would recommend Derek at Credit Absolute!
Ashley Krolak
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21:58 25 Nov 19
Thank you to entire team at Credit Absolute! We have accomplished so much in a short amount of time. They have helped my whole family increase our scores. They are organized, helpful and get the job done all while teaching you helpful hints along the way. I highly recommend this company for any credit needs.
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21:29 13 Nov 19
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02:07 01 Nov 19
My experience with Credit Absolute has been nothing but wonderful! The entire staff are very knowledgeable and understanding. Felica is the one of the nicest people.
Christopher Moore
Christopher Moore
15:10 03 Oct 19
Communication with Derick and the team couldn't be better. I spoke directly to Derick and he was upfront, honest and didn't waste time. I would certainly recommend Credit Absolute to anyone who is looking into credit repair. They'll give you an honest overview of where you are and what they can do to help you reach your goals!
David Burgess
David Burgess
19:02 20 Aug 19
Derick and his team have been extremely helpful and informative throughout this entire process. I would recommend to anyone who wants/needs to repair credit quickly! Worth more than the money without question!
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steve moore
23:32 16 Aug 19
Derick and his team were awesome! I would highly recommend their services if you are looking to refurbish your credit score!!! +A all around for his team and the willingness to help me out !
Zacary Roberts
Zacary Roberts
03:00 26 Jul 19
Felicia helped me out so much, the company is professional l, but they treat you like your their only client. They are thorough and honest and my credit score has gone up remarkably ever since I started working with them. Thank you so much!
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Chris Gunn
18:50 25 Jul 19
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15:37 25 Jul 19
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Christian Wunder
Christian Wunder
19:35 18 Jul 19
They have been great to work with. Going on 3 months now and my score has taken a huge jump. I've had items removed from my credit and every month we go over our strategy to maximize the improvements. Highly recommend :)
Baron Adelmann
Baron Adelmann
21:59 26 Oct 17
Derick and his team have helped me tremendously! He explains the process of improving your credit and does all of the work for you! My credit score has improved drastically and I know that I couldn't have done it without the help of Credit Absolute. Because of them, my business has continued to thrive in a way I never thought possible. Thank you Derick and the Credit Absolute Team!
Gabriela Lovelace
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23:17 30 Jun 17
I want to thank the wonderful team of Credit Absolute for all the work they did in help me clean my credit! They have teach me how to keep my credit clean and how to make it grow! I will be their customer for life and I recommend to anyone who needs help with their credit! Credit Absolute you are awesome!!!!
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Sho Sho Smith
22:31 16 Feb 17
Derek just made my day when I thought my credit was being compromised due to a balance on my late husband's credit card. He checked it out my credit health and assured me that I lost no points and the balance was forgiven. Great news! He gave me pointers on how to get my credit score even higher to put me into the premium level and coached me on getting back on my feet, credit-wise, after my husband's death. A great experience!
Vanity Hernandez
Vanity Hernandez
20:15 19 Jul 16
I was referred to Derick when my credit score dropped 3 points as I was in the process of trying to get a mortgage loan. Derick gave me GREAT advise and also helped confirm all the credit myths I have overheard on how to improve your credit score. Not only did he give me advise, he not once tried to have me hire him like others usually do. Derick was genuine and that's hard to come across with business. :)
Ian Farruggio
Ian Farruggio
19:29 05 Jul 16
Derek was completely professional and offered helpful suggestions to help me improve my credit. He was honest, in that his services were really not needed and helped to point me in the right direction free of charge. If you have any questions regarding your credit, this is the only place to go!!!
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