Watch out, America. It’s time to start thinking before you swipe your credit card.
According to a study from WalletHub, the total credit card debt of US consumers now exceeds $1 trillion. In fact, last year American consumers took out more than $100 billion of credit card debt, which makes it the highest single-year amount since 2007. On average, each American household owes more than $8600 on their credit cards. Many people believe the accumulation of debt is a reflection of America’s confidence in the economy.
Jill Gonzalez, a senior editor at WalletHub, spoke with ABC news about this crazy occurrence. “We haven’t seen anything like this,” Gonzalez said. “Consumer confidence is at its highest point. Since the recession, people have been saving up for houses, cars … new furniture and appliances, which often get charged on credit cards.”
According to Lend EDU, mortgages are a big reason people are unable to pay their credit card debt. In fact, American homeowners struggling to pay their mortgage increased by 5.2% during the last quarter. And while credit cards are a major part of a person’s finances, they only take up about 9% of the banking industry’s $17.4 trillion in annual business.
In order to stick to your budget and pay off your debt, there are a couple of things you can do. First, take a hard look at what you pay for things each and every month. Then determine the things you actually need to be spending money on — and the things you don’t. For example, is a night out with your friends really worth setting you back $30 or $40? Set a budget and stick to it each month, and don’t go over it.
Figure out which loans you need to pay off first so you can get those out of the way as quickly as possible. If you were to tackle the loan with the highest interest rate, you are getting it out of the way so it doesn’t add up over time even more. You could also pursue refinancing. If you have any home equity that you can delve into, you might consider doing that just as long as you’re not risking losing your home.
The Federal Reserve indicated consumer debt in the United States had reached nearly $3.4 trillion by May 2015. Since then it has only continued to rise — and growing credit card debt is a big reason for that.
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In few days of working with (debt company redacted by the editor), my credit score has raised high enough to be able to qualify for a mortgage loan that I was not able to before. Besides that, he’s so professional and friendly and easy to work with that it made the whole experience quite enjoyable. I have already recommended him to several people and all gave me positive replies.
$8600 in credit card debt is a scary statistic. I used to have around $6k in credit cards alone and haven’t accumulated as much debt since. Americans, including myself, need some type of motivation to stop spending carelessly. We all know to spend less than we earn but our emotions get the best of us.
A lot of consumer spending is driven by emotions. Advertising agencies know that. It’s why you’re targeted so much by television commercials. Sometimes, it is in the subconscious. Watching reruns of “Spendaholics” on YouTube provided great insight into the emotional pain driving peoples spending habits.
Material things cannot make you somebody. If you aren’t somebody without them, you won’t be somebody with them. For example, many years ago, a coworker bought a Louis Vuitton purse on clearance at $1250. She bought a pair of Salvatore Ferragamo shoes on clearance for $800. I asked her where she wore them. She said nowhere. They just sat in the closet. She bought them because she thought it made her somebody.
I could have spent four 2 day/2 night weekends in Houston doing what I like to do. Shopping a little for gifts, and clothes, going to the art museum, and museum of natural science. I’d watch Rice play baseball for two games each trip. Food, gas, lodging at a Residence Inn, and buying a lot of books. I’d get a 1.5 hour massage. SMH.