Carrying consumer credit card debt is more readily accepting today as being normal.
Too many Americans are buying in to the notion that their credit score is the only score that is truly important. They know that the score is derived from their credit bureau report, where every purchase and consumer choice is recorded.
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"A mortgage casts a shadow on the sunniest field."
- Robert Green Ingersoll |
What most people do not realize is that too much debt often times results in people being harassed by bill collectors, lawsuits, foreclosures and bankruptcies.
One of the biggest problems in the American economy is consumer debt. The consumer credit card debt stands above $4 trillion, including credit cards, mortgages and car loan debt. Of this, more than $18,000 per household is consumer credit card debt.
What makes matters worse is that interest must be paid on this amount. The interest paid on debt reduces the consumer's ability to make new purchases, placing a drag on the economy and thus compounding the problem.
Sixty percent of all American families actually end up spending more than their after-tax income, while consumers spend on average about $50 billion more, collectively, than they earn.
As many as 32 million families or close to 80 million people run with an annual deficit of $8,160, on average. They are exhausting their savings, selling their investments and still carrying huge debts.
Sadly, it would take very little to push them over the edge, into bankruptcy. In most cases, a few months out of work or reduced income would be enough to trigger this tragic financial event.
An increase in bankruptcies raises unemployment and slows down the economy, eventually causing consumers to drastically cut down on all forms of borrowing. These consumer cutbacks have grave implications for the economy and the Federal Reserve Bank.
Without consumers and corporations borrowing, there can be no new money created. The Federal Reserve Bank's worst fear, like the credit card companies is that the consumer may stop borrowing at some point and may slow down or stop their negative spending practices.
Every move by these credit card companies is designed to keep the consumer on a spending and borrowing spree. This is the only way of perpetuating their growth, and they do it on the backs of the American consumer.
As a result, consumers are now massively into debt and they feel as is there is no way to correct the situation except to file a personal bankruptcy.
However, a better way to address their consumer credit card debt would be for each and every consumer to take total and complete personal ownership of their negative spending behaviors and to commit to changing their ways.
Step one is to list your debt from largest to smallest; make minimum payments on every account except the smallest; tackle the smallest debt with a vengeance, paying it off and closing the accounts as quickly as possible; CELEBRATE, that's one down and more to come.
Step two is to take the money you were using to pay off the first debt and apply it to the payment on the next smallest debt. Pay it off next, and continue until your debt is paid off.
Step three is to focus on your income at the same time you are paying down debt. Identify ways to save on expenses and increase your monthly take home pay. Working overtime, asking for extra hours, getting a 2nd or 3rd job, creating a new home based business, selling stuff on ebay and holding garage sales are all proven ways to increase your ability to pay down debt more quickly.
Consumer credit card debt is a sickness. Americans are becoming more and more addicted to credit cards and the crisis is turning into a national epidemic.
Stop participating in this national illness. Stop being "normal".
Swear off consumer credit card debt completely. Commit to a debt free lifestyle, the rewards are priceless.
"Do not accustom yourself to consider debt only as an inconvenience;
you will find it a calamity."
- Samuel Johnson |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
