How Many Consumers Have Debt Troubles?
In 2010 the average American household carried $15,000 in credit card debt.
The good news is that TransUnion has reported that credit card delinquency has gone down 17 percent. Two-thirds of Americans carry at least one credit card. Thirty-three percent of those Americans carry a balance up to $10,000.
Thirteen percent carry balances over $10,000. Credit card statements now come with a query stating how many years it will take to pay off the balance if only minimum payments are made. If only minimum payments are made, the interest can add up to more than the balance.
That is just the statistics for credit card debt. There are other debts also that consumers carry such as mortgages, student loans and car loans. However, at least these types of loans carry a fixed-interest rate. These loans are a bit more affordable to pay back than credit card debt.
The best to stay out of debt is do not spend what you cannot afford. Pay everything in cash. You do not have to worry about a credit rating if everything is paid in cash.
To get out of debt, try following the following tips. Look for the smallest debt. Take whatever extra money that is affordable and apply it to that debt. Keep paying extra over the minimum payment until that debt is paid off.
Once that debt is paid off, take the money that would have been used for that debt and apply that money to the next smallest debt. Keep doing this until that debt is paid off. Keep doing this until all debts are paid off. This is what is known as the snowball effect.
The reason to pay off the smallest debt instead of the one with the highest interest is because once a debt is paid off, an adrenaline of emotion will happen. This adrenaline will help one see that the snowball effect works.
If there is a mortgage, contact the lender and see about making bi-weekly payments instead of monthly payments. Making bi-weekly payments will get you out of debt a year sooner. This is because 26 payments will be paid instead of 12.
Try to save some money in a savings account for emergencies. This way if an emergency does happen, a credit card will not have to be used.
Hopefully this helpful hints will let consumers live a debt free life.If you need a little help getting started on debt repair, try the experts at Good Life Credit.
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