The level of credit card debt in the USA is disturbing. Those who appear to have debt that is out of control have an average of over $15,000 of debt all of which will have a high level of interest applied at the end of each month. Even if users are able to pay the minimum that the card companies require at the end of each month their balances will hardly come down; it is core debt. It seems that the lessons of the recession have not been learned. While a full blown recession is unlikely to return there is little doubt that there are many households that are ill-prepared for any financial problem that might occur.
Emergencies
A minority of families have any provision for a financial emergency and even though unemployment figures show that there is definite growth in the economy and in job opportunity, there are no guarantees in life. It is important to prepare a budget and follow it. Why not ask yourself what you would do if you lost your job? That will bring home the reality of your situation and the need to act.
It is easy to see that during the recession some had to turn to their credit cards simply to meet their everyday expenses. It appears that not a lot has changed with a significant number of people. They should all look at their spending and adjust things to reduce their outgoings and as a consequence their problems. Credit cards are an expensive way to fund your lifestyle.
A Route to Credit?
Some people believe that credit cards are the easiest route to obtaining credit. There was a time when the card companies were aggressively marketing themselves, looking for new customers and making introductory offers that certainly attracted plenty of new users. Often people had several cards with a generous credit limit on each. The danger is that users built up balances on each and suddenly found themselves unable to juggle those balances to avoid substantial interest each month.
People in need of a credit score can certainly obtain one by using credit cards and using them properly. That means spending sensibly and making appropriate payments. When cards are used up to their credit limits and incur high interest charges it is unlikely that the resultant credit score of the user will impress anyone.
Bank Loans
It makes far more sense to avoid high interest charges and one way to do that is to obtain a bank loan and make the instalment repayment on time for every month until the loan has been repaid in full. A personal loan may not be a route than can be used if you lose your job but if you have a regular income and can show that you can afford to repay the amount you apply for there are online realistic unsecured loans lenders websites who are prepared to help.
If you are living beyond your means and are using a credit card to fund your lifestyle you should stop immediately and look for a solution to your problems. That may involve economies but it can also be a personal loan to pay off your credit card debt at a much cheaper interest rate than the card companies charge. Your credit score will start to rise as you make the instalment payments. It will take time but as your score improves, so do your future financial prospects and the avenues that open to you.
It is a message that has yet to reach the ears of many families in the USA. They appear oblivious to the dangers of a credit card. The debts being accumulated will not just disappear. While a great deal of toxic debt was written off by financial institutions during the recession because it was deemed irrecoverable that is not an escape route that people should rely on. It is essential to address financial problems with determination and self-discipline. That means preparing a budget and sticking to it. It also means paying off credit card debt that is costly at best; a good online lender will show how that is possible with a competitive consolidation loan.
No Comments