How To Maintain a Below Average Credit Card Debt
Are you familiar with the average credit card debt? Make it your goal to stay beneath that benchmark!
Are you familiar with the average credit card debt in the United States? Depending on who you ask, the figures are staggering: some studies suggest a figure of up to $9,000 per person. It's hard to arrive at a single accurate answer to this question -- but actually, it doesn't really matter that much. What does matter is that any significant credit card debt is too much to carry.
What's the Problem with Credit Card Debt?
Sure, any debt is problematic, but it's simply a fact of life in modern America. Most people have mortgages for hundreds of thousands of dollars, so why does another five or six thousand dollars in credit card debt make a difference?
Actually, credit card debt is problematic for a number of reasons. For example, the average credit card debt arises not from necessities (like shelter -- a mortgage -- or transportation -- a car loan) but from luxuries (like meals out, clothing, and entertainment). A growing credit card debt can interfere with your ability to pay for the necessities by forcing you to find money to pay for luxuries.
Furthermore -- and most importantly -- credit cards amass debt and interest at an alarming rate. Mortgages and bank loans are fixed. The interest rate may fluctuate slightly over time, but generally speaking, you've borrowed a set amount of money and have a rough idea of how much you have to repay on a monthly basis.
With a credit card, your debt is much more flexible: it can grow, and grow, and grow without your ever realizing it. Furthermore, the interest payments and monthly payments will get higher and higher. That's why it's so easy for the average credit card debt to get out of control: no one expects the kind of escalation a credit card can bring about.
How to Avoid These Problems
I'm not telling you that it's a terrible thing to carry some credit card debt. The problem comes when you treat your credit card like disposable income. Do not fall into the trap of pretending that purchases made on your credit card 'don't count.'
Whenever you make a purchase with your credit card, you should give it the same amount of consideration -- including questions like, Do I really need this? and, How will I pay for it? -- as you would any other purchase. As long as you budget credit card purchases, you should have no trouble staying well below the average credit card debt.
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