Credit Card Debt is THE Surest Way to Smother Your Financial Future

Even though we are ‘doing better’ as a nation with regard to the levels of personal debt that we are carrying, I still find the most current statistics on debt in America astounding! The recent (and ongoing) economic downturn has hurt many folks financially. And it looks as though many of us are still relying on the short-term, high cost loans that ‘plastic’ provides to keep us afloat.

The Facts

•Average credit card debt per household with credit card debt: $16,007* -*Average APR on credit card with a balance on it: 14.67 percent, as of Feb., 2010

•36 percent of respondents said they didn’t know the interest rate on the card they use most often.

•Total U.S. revolving debt (98 percent of which is made up of credit card debt): $852.6 billion, as of March 2010 (Source: Federal Reserve’s G.19 report on consumer credit, March 2010)

•About 56 percent of consumers carried an unpaid balance in the past 12 months. (Source: “The Survey of Consumer Payment Choice,” Federal Reserve Bank of Boston, January 2010)

•Undergraduates are carrying record-high credit card balances. Twenty-one percent of undergraduates had balances of between $3,000 and $7,000, also up from the last study. (Source: Sallie Mae, “How Undergraduate Students Use Credit Cards,” April 2009)

•44 percent of small-business owners identified credit cards as a source of financing that their company had used in the previous 12 months – more than any other source of financing, including business earnings

•Credit cards are now the most common source of financing for America’s small-business owners

Some Takeaways

Remember do NOT use credit cards to finance your lifestyle.

•Only charge what you can afford to pay off (in full) each month.

•If you have trouble with overdoing it with the credit cards, whittle the number of cards you own down to 2 cards.

•Resolve to pay cash.

•AND, put your credit cards in a freezer bag filled with water. Freeze them. Defrost and use only when needed. -No microwaves allowed.

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