When we think about how to handle our credit card debt, it’s usually the first thing we hear about ‘but’. Credit card debt can be a source of extremely intense stress and worry, and this stress leads to the worst.
According to a recent study by Consumer Focus on Higher Education expenses, Americans owe close to $9 trillion on their credit cards, ranging from $40 billion in the United States to $100 billion in Germany. And in the process, the overwhelming majority of those who are in debt inevitably end up scrambling to make ends meet.
Americans have become so strapped with debt that they no longer make full emergency payback on installment loans. Instead, it is always the elderly and disabled that will declare bankruptcy when their bills run out – and millions of us will be the victims.
A 2010 report from the US Federal Reserve Bank states that current consumer debt accounts for $220 trillion (that’s a 19 percent figure) and that this debt continues to outpace the rest of Americans’s in terms of outstanding loans and total credit responsibilities. Average interest rates are 22 percent higher than the national average, a staggering $742 billion.
According to the Federal Reserve Commission, when Americans make automatic sub-prime lending to companies with poor repartition of funds, interest rates are now as high as 29 percent%. In fact, rates that have been consistently higher in recent years have continued to this day.
Although the rate of non-instant default has not been the lowest since 1990, it is still significantly higher than virtually every other type of default: defaults and foreclosures on consumer loans. So when you see that big $742 billion or so amount to an adult scrambling for even one sub-prime loan to pay off your credit card debt, remember the lesson of the 1990’s – bankruptcy and foreclosures are not the end of the world.
When we lose sight of the bigger picture, millions of Americans are now saddled with credit card debt that could end their lives by simply walking away. As The American public will be well served to re-establish some sanity and a sense of possibility by remembering all that was important about that time – it wasn’t when you got to high school, when you got to pharmacy school or when you got to high school graduation.
The thing about life, really, is that you will lose sight of what’s important – and what’s most important is your ability to use your credit cards all day long, and paying off these huge amounts of debt – without a financial emergency to elapse.
If you are one of those millions of Americans who has not yet attained financial independence, you may want to take this time to consider the following…
– Do you plan on moving into debt-free time?
– How are you currently managing your down payment on the accounts from the interest charged on your credit cards?
– What can you do to eliminate the pain?
If you answered ‘Do you plan on moving into debt-free time?” in the negative way, this could be it. In fact, you might want to rethink your decision entirely. Here are five lessons you can take from the debt-free financial future you’re already dreaming of…
‘ Debt-free time is not a permanent solution
Debt-free time usually requires that you make one significant change. And yes, that change is to your advantage. Most people do not feel like they can make major changes overnight. And not everyone feels that way. But you need to remember that you can easily make major change when you make the important decision to pay it all back within the next few months. And not everyone deserves the reward of going out and getting in debt-free.
Debt Has Become A Problem
People are really getting caught in the midst of a huge financial crisis and it is a good thing that some of the leading experts in the area are fighting each other to stop the tide of the financial crisis in the US.
Debt has become a problem. At least 300 million Americans are under a huge amount of debt as their income and living costs are constantly increasing each month that we cannot afford to buy the things we want. People are going to spend over 100% of their income on food alone, healthcare and other living expenses. In 2005, almost 70 million Americans were making monthly minimum payments. This is more than twice what most families are spending per month.
There appears to be an obvious solution as people are being told that they must use cash to pay off their debts. This is asinine in the way anyone can think of it but the banking industry is using this as a ploy to try and suck money out of other people.