Friday, August 3, 2012, AM | 19 Comments
According to the Federal Reserve, consumer borrowing rose by $17.1 billion in May for a total of $2.57 trillion. Borrowing increased mainly due to record levels of student and auto loans, which reached $1.7 trillion. The folks who keep Debt Records say this is the highest levels since 2007.
With more consumers turning to credit cards for purchases, revolving debt rose by $8 billion, increasing the total credit card debt to $870 billion, says Federal Reserve.
That means consumers must watch their balances and their budgets to avoid hefty debt and interest charges.
Reasons for high spending using credit cards…
There can be many reasons but experts blame two for the most part:
Some experts blame slowdown in job growth. Creating jobs never picked up as the government had hoped. Goes against my logic.
Others say the decline in consumers confidence is the reason people are spending more using their cards. Beats me why lack of confidence in the economy would be a reason to spend more.
I keep saying this: credit card companies are swelling their already fat bellies with consumers spending using their credit cards and accruing debt that they won’t be able to pay.
Here is what to do…
There are a few things you can do to pay off your debt faster:
Pay more than monthly minimum
Some folks are so hooked on the minimum, it’s almost routine to pay only the minimum every month.
They would pay the minimum alright but would go out on the town and spend money recklessly and needlessly. Shame on you guys who do this and then cry aloud about lack of money and unable to pay debt.
Straighten out your priorities. Set goals about how much to save and spend. If you don’t have the money to pay for your vacation to a far far land, just don’t go. Find some place in your local community for daytime trips.
Avoid accumulating more debt
It’s not the right time to apply for more credit cards. I have two and that’s more than enough for me and my family – American Express for gas and travel, and MasterCard for groceries and other purchases.
You would have extremely hard time to get out of debt while you are accumulating more debt. The cycle will never end.
Pay off high interest rate debt first
Many experts suggest to pay down the highest interest rate balances first. No matter how high your income is, the high interest rate chews up your potential saving.
In a Nutshell
These are but some of the ways you can start paying off your credit card debt.
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