Does a credit card affect my credit score?
Having a credit card itself doesn’t affect your credit score but how much you borrow and how well you pay off your credit card, or credit cards, every month will reflect on your credit score.Your credit card company will share details of your account activity with credit reference agencies. This allows them to update your credit score.
This then allows other lenders to determine your ‘creditworthiness and decide how much of a risk it is to let you borrow money from them.
It’ll also be noted on your credit report. This shows your credit history, including how much you owe, how many payments you’ve made, if you’ve missed any payments and details of your credit limit.
How credit card debt can affect everyday life
Credit card debt affects everyday life, not just your bank balance. Whether you’re struggling with one credit card or have borrowed from a number of credit card issuers, it’s important not to ignore how much money you owe.
Mental Health
Living with debt can, understandably, have a serious impact on your mental health. In fact, according to industry statistics, the likelihood of having a mental health issue is three times higher amongst people living wit debt, with a recent Forbes article suggesting that financial stress can cause similar feelings to PTSD. Financial distress can also be an isolating experience, with many people not knowing where to turn for support and internalizing feelings of stress and failure.Social Life
This probably seems obvious but living with credit card debt can have implications on your social life. Hiding debts from friends will mean that won’t give your finances a second thought. Invitations to dinner or to grab after work drinks can often seem too tempting to give up but struggling with debt can make it hard to keep up with.Happiness
Money can’t buy happiness but there is a direct link with financial security. Living a life worrying about how you’re going to make your next bill payment can be daunting and stress-inducing and lead to anxiety, depression and a host of other psychological problems.Worried about credit card debt?
If you’re worried about credit cards, our expert advisors can help you become debt-free. They can offer advice about the best way to deal with all your credit cards and outstanding debt to help you regain control of your finances. Call 416-842-0040 to find support today.
