Credit Card Debt Information and help

By: Justin Narin
Submitted: 2009-02-06 13:28:07
Print this article | For publisher | Social Bookmarking
Rating:
 

You’ve probably heard the frightening statistic that the average American owes more than $8,000 in credit card debt. Fortunately, that statistic isn’t completely accurate. Here are true credit card debt info and statistics.

Average Credit Card Debt
The average credit card debt is actually around $2,200. This is still a lot of money when you consider that the average income is $48,600, but it’s not a dire figure.

However, only 45% of Americans have credit card debt. 23% of Americans don’t even have credit cards. The remaining 32% pay their credit cards in full every month. 8.3% owe more than $9,000 on their credit cards.

If you carry a balance on your credit cards, you can become one of the 32% who doesn’t. Although it seems challenging with rising fuel and food prices, resolving to cut back on your spending can make a real difference in your ability to pay debt without truly restricting your enjoyment of life.

Total Consumer Debt Info
You may be wondering how these statistics are derived. They’re derived in part from the Federal Reserve’s Survey of Consumer Finances, which is conducted every three years.

As of June 27, Americans had a total of $2.46 trillion in consumer debt, but this figure includes mortgages, auto loans, student loans, and other non-revolving debt. Revolving debt, which is usually credit card debt, was only $904 billion. While this figure is still high, it’s not the devastating figure you’re more likely to hear on the news.

What Can You Do?
If you’re one of the people with revolving debt, you might be wondering how you become one of the people without it. It’s not easy, but it can be done. The key lies in learning to control your spending. American society doesn’t make that easy because our economy relies on spending, but if you have the willpower to do what’s right for your personal finances, you can do it.

There are three basic steps to controlling credit card use:

  • Stop using them for one month.  See if you can pay for everything with cash in your pocket. Checks don’t count. It must be cold, hard cash. Once you actually see the money leaving your pocket, you’ll have a much better idea of your actual spending. You’ll also discover your money cycle because you won’t be able to spend money that isn’t in your checking account.
    There are exceptions to this rule. For example, you can’t pay your bills, rent, or mortgage in cash. Use checks for your monthly bills, but write them out and deduct them from your checkbook balance before you withdraw cash to spend.
  • Reduce other expenses to free up more cash.Consider canceling or reducing cable, conserving energy, and buying less expensive groceries. Rather than putting the freed up cash in your pocket, use it to pay off debt, especially debt from high-rate credit cards.

Avoid buying things you want, but don’t actually need. Food is a need. Dinner in an expensive restaurant is not. Shoes for your children are a need. $200 designer sneakers your child will grow out of in three months are not. Transportation is a need. Unless you live up a steep, unpaved road, a $40,000 SUV is not.

Impulse purchases are usually wants, not needs. Wait at least two weeks before buying anything. If you still want it after two weeks, it might be a need, or it might simply be something you really want. If it’s something you need, buy it. If it’s something you really want, buy it only if you can afford to pay cash without limiting your ability to pay off debt or save for retirement. If you’re still paying off your credit cards, avoid buying things you want, no matter how much you want them.

Once you learn to control your spending and differentiate between needs and wants, you can pay off debt more quickly. Soon you’ll be one of the 45% of Americans who pays off their credit cards every month, and you won’t be contributing one dime to the $904 billion in revolving debt.

Source: http://www.bills.com/credit-card-debt-info/

Justin has more than 5 years experience as a financial adviser, his key areas are loan consolidation, debt relief, mortgages etc.

Article source: Expert Articles

Most Recent Articles in Credit category

  • Debt Settlement Solutions Or Bankruptcy? Get Debt Reduction - By: Marion Patrick
    When you're faced with a stack of debt than seems practically insurmountable, you are faced with a stark selection - debt settlement or bankruptcy.
  • Apply Online For Your Credit Card - It's Easy! - By: Greer Lean
    Applying for a credit card can be a real hassle, but not when you can apply online. You can apply from the comfort of your own home, at your desk, you could even do it in your pyjamas at the kitchen table if you really wanted! Read this article to get all the info you need to apply online for a credit card that best suits you.
  • Email Fraud - How I Saved My Credit - By: Debbie Ramos
    The online world is rife with dangers to the uninformed. Keeping yourself and your credit health protected is a tough job. Having resources and being able to recognize the potential danger, however, can make a big difference.
  • Credit Cards Require Discipline - By: Randy Foster
    Learning how to use credit cards to our advantage. Credit cards can be used to establish credit, rebuild credit, and earn rewards or cash back at the end of the month. Credit cards cans be an asset if used properly and with discipline.
  • Getting your free report - By: David Mayer
    The article looks at the system for getting access to your free credit reports and explains what some of the problems can be.
  • Fixing Your Credit Report - By: Michiel Van Kets
    Getting credit is becoming increasingly harder to acquire, due to the recent economic crisis lenders are looking more closely at borrowers' credit records and, in many cases, only lending to those they consider low risk.
  • Credit Unions: A Cheaper, Friendlier Alternative To Banks - By: Paul Hazen
    Credit unions have emerged as a safe haven for consumers. Because credit unions avoided the risky loans and exotic investments that brought down so many banks, they remain relatively untouched by the recent financial crisis, credit union members have peace of mind knowing their money is safe.
  • Credit Card Debt Information and help - By: Justin Narin
    You've probably heard the frightening statistic that the average American owes more than $8,000 in credit card debt. Fortunately, that statistic isn't completely accurate. Here are true credit card debt info and statistics.
  • Credit Card Debt? Dont Ignore It! - By: Jake Avey
    Have credit card debt? You're not alone and you don't want to hide or ignore it either, if you do the situation will only become seriously worse and over time come and bite you in the "you know what." I have some answers for you.
  • How To Report An Error On Your Credit Report - By: Justin Narin
    Thanks to the FACT (Fair and Accurate Credit Transactions) Act, all U.S. residents will be allowed one free credit report annually from each of the three major credit reporting agencies - Equifax, TransUnion, and Experian. This legislation makes it easy for you to keep an eye on your credit profile throughout the year.