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Bankruptcy: A remedy for those falling for credit card traps

New Jersey consumers who find themselves overwhelmed by debt may be fending off harassment by debt collectors. Unfortunately, many people fall into the traps set by credit card companies. These companies rely on consumers to accumulate credit card debt because the interest they charge on unpaid balances is what ensures a significant part of their profits. Many consumers who experience financial difficulties due to the use of credit cards have turned to the bankruptcy court in order to confront the issue responsibly.

Lenders typically set credit limits that are beyond the levels that consumers can actually pay per month. By setting their own limits, card holders can ensure full monthly payments. This will avoid the interest they would be charged if only minimum payments are made.

Also, many credit card companies encourage consumers to use their cards for cash advances at ATMs. Cash withdrawn from ATMs is typically subject to interest rates that can exceed 25 percent. Cardholders must also be selective about which cards are used for foreign transactions. Transaction fees and accumulated interest can hold consumers in debt for many years -- even decades.

In many cases, overwhelming credit card debt follows unanticipated expenses such as loss of employment or medical emergencies. However, even if New Jersey consumers have fallen into marketing traps of credit card companies, they may find comfort in knowing that remedies are available. An experienced bankruptcy attorney can assess the financial situation of a client and explain the available options to enable the person to make informed decisions about the most appropriate route forward.

Source: ktvb.com, "Avoid these 4 common credit card traps", Aug. 24, 2016

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Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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