What do large credit card balances mean for your overall financial health?(1 point) Responses You have a high debt burden to financial institutions. You have a high debt burden to financial institutions. You always pay your credit cards balances on time. You always pay your credit cards balances on time. You need more credit cards to spread out their usage. You need more credit cards to spread out their usage. You have a significant amount of excess money to spend.
You have a high debt burden to financial institutions.
The correct response is: You have a high debt burden to financial institutions.
Large credit card balances can have negative implications for your overall financial health.
One major concern is that having a high credit card balance indicates a high debt burden to financial institutions. This means that you owe a significant amount of money to your credit card issuers, which can negatively affect your credit score and make it more difficult to obtain future credit or loans. High levels of debt can also lead to financial stress and strain on your monthly budget as you try to manage and repay the borrowed money.
On the other hand, if you always pay your credit card balances on time, it can indicate responsible financial behavior. Consistently paying off your credit card debts demonstrates that you are able to manage your finances and meet your financial obligations. This can have a positive impact on your credit score and overall financial health.
The suggestion that you need more credit cards to spread out their usage is not necessarily a solution to large credit card balances. While having multiple credit cards can increase your available credit, it can also make it easier to accumulate more debt if not managed properly. It is important to use credit cards wisely and only spend within your means, regardless of the number of cards you have.
Finally, having a significant amount of excess money to spend is not typically associated with large credit card balances. If you have a high balance on your credit cards, it usually means that you have already spent beyond your means and may need to reassess your spending habits and financial priorities.