Credit card debt,
Definition of Credit card debt:
An unsecured financial obligation to one or more banks or companies that issue consumer credit cards, resulting from purchases or advances using the card that have not yet been paid back. No collateral is required for credit card borrowing, but interest rates tend to be higher than for other types of loan, and severe late payment penalties may apply.
Generally, credit card debt refers to the accumulated outstanding balances that many borrowers carry over from month to month. Credit card debt can be useful for borrowers seeking to make purchases with deferred payments over time. This type of debt does carry some of the industry’s highest interest rates. However, credit card borrowers do have the option to pay off their balances each month to save on interest over the long term.
Credit card debt is a type of unsecured liability that is incurred through revolving credit card loans. Borrowers can accumulate credit card debt by opening numerous credit card accounts with varying terms and credit limits. All of a borrower’s credit card accounts will be reported and tracked by credit bureaus. The majority of outstanding debt on a borrower’s credit report is typically credit card debt, since these accounts are revolving and remain open indefinitely.
How to use Credit card debt in a sentence?
- While useful for making purchases over time, credit card debt does carry some of the industry’s highest interest rates.
- Paying down substantial portions of outstanding credit card debt is one of the best ways to rapidly improve your credit score.
- Credit card debt typically accounts for a significant portion of credit utilization on a borrower’s credit profile.
Meaning of Credit card debt & Credit card debt Definition