The Debt
In America, it is not only accepted that the majority of us are
knee-deep in credit card debt, it is normal. Two generations ago
it was just flat out wrong - a sin, to have any kind of debt at
all. Today it is quite a different story and credit card debt is
a mega, multi-billion dollar a year industry. The major credit
card companies are eating it up like hotcakes and our credit
reports are taking a lot of the heat. More than 75% of all
college students are in credit card debt within their first year
of school. From Sears to Visa to Diner's Club, people are adding
to the debt stock pile that the distributors thrive off of.
There are tens of thousands of websites that support and offer
more to this enormous problem and it has got to stop! We have to
draw the line individually, because there are no boundaries on
the excessive spending in America.
What's Really Happening
It's even stated in the Bible - "The borrower is slave to the
lender." In any case, where you have taken out credit on
something; be it a car, mortgage, student loan, credit card,
etc..., you are borrowing money. Not only that, but you are
borrowing more money than you need. The average APR (annual
percentage rate) on a credit card is 19%! In many cases, when a
credit card is "maxed out" you will pay only interest with the
minimum payment. As if this wasn't enough stress, the creditors
harass you like their life depends on it and you begin to feel
uneasy about even answering the phone.
Is Debt Consolidation the Answer?
Many consumers are drawn in by debt consolidation loans. It
feels like instant relief and the monthly payments go down.
Suddenly you feel like life is getting better by the minute. Oh
and what's this, there is left over money from the loan -
PERFECT! You
needed this for that yard project or
supplies or something that you've been waiting to have the extra
money for. Why not reward yourself, you have taken a big step
and your financial future is improving. Or is it? The fact is
that you have fallen into another trap. You are now borrowing
more money with an interest rate and you most likely got more
than you needed. Statistics show that even though the math often
works for a consolidation loan, the consumer ends up with his
ears nailed to the wall.
What to do Now
STOP BORROWING MONEY! This would be a good first step. Stop
right now. Do not borrow a dime. If you don't have it - don't
spend it. You can build up an emergency savings account to pick
up any negative events that may occur. This emergency savings
account is of course another article but you get the basic idea
right? Oh, you still feel you need plastic in your wallet? Get a
debit credit card. At least with a debit card you can only spend
what is in your bank account. You can also use most credit card
debit cards just like a credit card for purchases. Your credit
report will begin to reflect this positive behavior because
there will be no more credit card bills piling up. Here is a
saying to ponder before you think of making another large
purchase - "If you can't afford it, don't buy it. If you can
afford it, sleep on it."
To read more about how you can get your online credit report
free with no obligations and get a prepaid Mastercard debit card
with no immediate debt, go to
http://www.cleancreditonl
ine.com
About the author:
Tom Justice is the webmaster for Clean Credit Online and does
all the designing, marketing, SEO and maintenance for the site.
He has a passion for personal finance and how the economy and
consumers are affected by money. To see how you can use Clean
Credit Online to help you with your personal finances please
visit
http://www.cleancreditonline.com
"Plastic Debt" - © (2005) Reprinting is allowed assuming all
content is left the same.
