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Debt Facts And Information About Todays Debt In America
How To Avoid Debt?
Today the average American family owes close to 30,000 dollars in personal debt. Debt usually doesn't happen over night but sooner or later it will catch up with you. If the problem isn't dealt with, your finances can spiral out of control and you could be facing some tough consequences. In this article, we will look at how to avoid debt. We will look at some of the worst spending habits that lead to debt and help you to avoid them.
• Spending more money than you have is one of the most common problems when it comes to debt Credit and loans make it easy to go over your monthly salary. If your not able to make the payments on these obligations before you know it, you will have debt problems. Keep you finances in line and don't spend money you don't have.
•Use cash for you ordinary, everyday purchases. By doing using credit you are creating two problems for yourself. 1. You are creating more debt and 2. You will end up paying much more for these items than the original price when the interest is factored in. when you shop for your everyday things, leave the credit cards at home. Take and use only cash.
•Get out of the something for nothing mindset. This creates very bad spending habits. People like credit cards because they don't feel like they are spending any money. Yes you will have more cash in your wallet but this will be only temporary. Your debt will mount and you will have to face it someday. Use your Cash when you have it and keep the credit cards tucked away.
• Ask yourself this question. Have you ever paid off one CREDIT CARD with another? All your doing is moving the debt, not paying it off. Many times when you do this your just creating more debt. Most cards and loan offers have transaction fees. Consolidation loans are only worth it if your really struggling. Try to pay off one card at a time and free up income. Then you have more to put towards other debts.
•Consult a financial planner. Many banks and credit unions offer this service for free. If your already in debt, they can help devise a budget and repayment plan. They can also help you start a savings fund for emergencies so you don't have to rely on credit to get you through hard times
Debt Facts - Todays Debt In Our Country
- There are more than one billion credit cards in circulation today in the United States, including 600 million retail cards, 320 million bank cards, 140 million oil cards, and 30 million travel and entertainment cards.
- The typical family spends more than 90% of its disposable income on debt service.
- 24% of the bankruptcies filed last year, were filed by people that are only 25 years old and younger.
- The American people owe approximately $6.7 Trillion Dollars in household debt.
- Americans are putting less money into savings. (U.S. personal savings rate has decreased from nearly 8.5% in the early 1980’s to less than zero today.)
- Consumer debt is on the rise. It rose from $731 billion in 1992 to about $1.5 trillion today. This includes a huge increase in unsecured credit card debt: from $292 billion in 1992 to $654 billion at the end of 2000. It is a remarkable trend since credit card debt was only $50 billion in 1980.
- Three out of five U.S. households have an average credit card balance of more than $11,000. Paying only minimum payments at 24% interest, it would take 22 years to pay it off - and you would pay over $47,000 in interest.
- Most Americans are not saving nearly enough to fund their retirement.
- The amount lenders collect in late fees has risen from $1.7 billion in 1996 to $7.3 billion last year
