Believe it or not, credit card debt is one of the reasons why some relationships do not last. It is a common financial problem that people keep from their loved one. It is understandable why some people will choose to end the relationship after finding out that their significant other is burdened with debt. Nobody wants to be burdened with the debt of someone else – especially if you had been very careful in taking care of your personal finances.
But sometimes, this is not an option for all couples. Some are already too deep into the relationship to back out after uncovering the money mistakes of a loved one. They are either already married, about to get married or are just too in love to let this financial problem get in between them. It is actually sweet that you want to stick to the relationship despite the credit card debt. However, it is not as easy as you may think it will be. Love is not enough to help you get through this together. If you want to keep your money problems from driving the two of you apart, you need to work on this debt as soon as you can.
The truth is, this scenario is quite common in our society. According to a survey done and published in Nerdwallet, 35% of adults admitted to bringing credit card debt into a relationship. Most of them are revealed to be men – 42%. Only 29% of the women bring this debt into their personal relationships. The same survey revealed that 25% of the couples reported that the credit card balance of one partner has a negative impact on their relationship. It can be assumed that the couple may have a hard time doing things as planned because of the financial limitations brought about by having an unpaid credit card balance.
Although you are part of the statistic of relationships with one member having this type of debt, it does not mean you should give up easily. If you believe that your love is worth fighting for, go ahead and do something about the debt of your partner. But before you can work on the problem, you need to understand what causes the credit card debt to grow in the first place.
How do credit card balances grow?
According to a blog article published on WSJ.com, credit card debt is continually rising – with an increase of 11.57% annual rate. This is actually the second biggest rise when it comes to revolving credit – at least since the Great Recession happened.
Obviously, you can only solve your problem with credit cards by paying it off. But to make your debt solution last, you need to know what caused your significant other to fall into debt.
For one, he or she is clearly not a smart credit card user. But you need to find out why they are that way. There are a couple of reasons why someone could amass such a huge amount of debt.
- They are victims of identity theft. Sometimes, it is just a case of bad things happening to good people. Identity theft does not exempt anyone. If your significant other was too late in realizing that they are victims of identity theft, they will most likely be the one to shoulder the credit card payments. If this is the case of your partner, they deserve all the support and help that they can get from you. After all, their debt is not their doing. However, they need to boost their efforts when it comes to credit monitoring to avoid becoming a victim of identity theft once more.
- They do not have an emergency fund. Another reason why some people have a lot of credit card debt is because they failed to prepare for that one emergency that cost them a lot of money. Not having an emergency fund is one way for consumers to end up with credit card debt. While this may be the fault of your partner, it is not as bad as you would think. All you have to do is to encourage your partner to save. That way, they will no longer be placed in a position wherein they will have to borrow money in order to get out of an unexpected situation.
- They have other priority debts. There are also times when your partner simply has too much debt that they are running out of cash. They have to prioritize other debts like student loans and that leaves them without the cash to spend on their basic necessities. The solution is to use their credit card in order to buy what they need. Since the cash is running low, they fail to pay their balance in full at the end of each month.
- They are impulsive spenders. The last reason why your partner may be dealing with a high credit card balance is because they are impulsive spenders. If this is the reason, then you know that you have a lot of work before you. Being an impulsive spender is not something that you can change overnight. You have to break a lot of habits – which is not an easy thing to do. There may be times when you will get into arguments with your significant other.
There is an interesting article published on Forbes.com that gave an interesting take when it comes to credit card debt. The author said that a lot of people admit that they cannot even remember what they bought. This means they got into debt because of small purchases and not a big one. Those extra purchases that are too big for their cash budget accumulated over time are the culprit.
The convenience that comes with using credit cards and the high interest rate makes it a dangerous purchasing tool to use. It is very easy to overuse it and fail to pay it all off when the billing arrives.
What can you do to help a loved one deal with credit card problems?
When your loved one is clearly struggling with credit card debt, it is only right that you try to see how you can help them out. According to a study done by MagnifyMoney.com, 42.4% of Americans have a balance on their credit cards. The same study revealed that the average balance of the survey participants was $10,902. This is a high amount to owe on high interest credit cards. They also revealed that more than 75% of credit card holders pay an interest rate above the average of 15%. That means they have been deemed high risk credit holders – or at least, higher than the average. The calculations of the article indicated that if a credit card holder has an 18% interest rate, they are bound to pay at least $1,707 on interest.
You want to avoid this because you are wasting that much money on your credit card debt. You need to focus on erasing debt so you can be free from the burden of too much credit payments.
It might seem unfair for you to have this burden when you clearly had no hand in accumulating that debt. But if you really love them, you cannot just stay in the sidelines and watch them suffer. Here are four things that you can do to help.
- Communicate. Open the lines of communication. Do not make them feel ashamed of their debt. As they all say, you need to hate the sin and not the sinner. Show your support so your significant other can overcome this financial difficulty. Assure them that they can talk to you about their credit card struggles anytime.
- Be firm but forgiving. There are times when dealing with credit card debt is like battling addiction – especially when your significant other is an impulsive spender. You need to set clear rules and be firm in implementing them. You need to be forgiving but always be firm so your partner will make an effort to change their ways.
- Share the burden. If you can, you may want to share the burden. You should never run from credit card debt, even if it is not yours and it is owed by your partner. You need to stand by them and try to carry some of the burden. You can literally help them pay off the debt by using your own money. Or you can support them by helping them save their money. There are many things that you can do – even if it is just a simple reminder of their monthly payments.
- Live by example. You should also live by example. If your partner is trying very hard to curb their spending so they have enough money to pay off their credit card debt, you should not live a luxurious lifestyle. If they have to live a frugal life, you may want to live the same beside them. For married couples, this is easy. For partners living in separate homes, having the same lifestyle is not necessary. However, it will help encourage your significant other to alter their lifestyle in order to save enough to pay off their credit card debt once and for all.
To know more about credit card debt, here is a video discussing the different causes that will land you with too much balance on your card. Learn about them so you can try to avoid these mistakes.