If that figure worries you, it should.
The growing debt is posing a huge problem in the economy, much like a cancer cell, that if not caught and treated as soon as it is found, can be potentially fatal. It’s not a matter of “IF”, but “WHEN” the country’s deficit will be too much to bear.
To really fix this problem society needs encourage much more economic growth. That is to say, start increasing society’s income and revenues as a whole- to create more high earners, and more millionaires, to support more taxes. Instead of heavily taxing the top 1%. However, that is much easier said then done.
Where is all this credit card debt coming from?
When things are good we like to treat ourselves, whether it’s a nice dinner, or a small splurge on something like a watch, clothing, or technology.
However, as a society we are severely under saving, with many of us unprepared for even a small emergency. Something as small as repairing a home appliance, or a car mechanical issue, can set us back hundreds or thousands of dollars.
Since nearly everything goes on our credit cards, all these things start to add up, and before you know it your next monthly bill is showing up at your doorstep.
The truth is a lot of credit card payoff debt is also coming from students, small businesses, and house holds that lack health insurance or are experiencing unemployment. When it’s already hard to make ends meet what other option do you have?
Further more, do you even know how long it will take you to payoff your credit card with just the minimum payment? Test yourself with this credit card payoff calculator, I’m sure you will be quite surprised to see how much more you will end up paying, and how long it will take.
Houston, we have a problem.
Revolving debt is increasing, and it seems like things are spiraling out of control. How can you get a grasp before it gets too late?
It’s always best to pay off your balance every month, that way you can avoid late fees and paying high interest rates. If you’re not able to do this then this is the first sign that you are not living within your income, and your savings strategy is severely lacking.
If that sounds like you then first, assess your budgeting – make sure you are not spending money you have not yet earned. That may mean making a few necessary cut backs on leisure and entertainment until you get a better handle on your debt and savings. If you can’t handle your debt when you have a reliable income source, what are you expecting to happen in your later years?
Ask any financial advisor when you should start saving for retirement, and they will probably all say the same thing “yesterday” or “as soon as possible”. Social programs may not be as readily available when it’s your turn to retire, and even so they may not provide enough to live comfortably. This is your wake up call.
Roll down your debt.
Have you ever heard of a balance transfer credit card? Balance transfer credit cards are one of the newer offers in the market, gaining more and more popularity. Essentially a credit card company will offer you a low, or no interest rate, if you transfer your balance to them.
The low interest period is only offered for a limited time, with some companies offering 6 months, while other companies offer up to 15 months or even 21 months, before returning to the regular high APR. It is definitely worth checking out and this can be a great grace period to pay off all, or a large portion of the debt you have accumulated.
Don’t bury your head in the sand.
Sometimes you just need to take a small step in the right direction. Once you gain your momentum you can better plan for the future. Try to shift your spending from your credit card to cash or a spending account, to better stay within your limits.