Americans Still Plagued By Massive Credit Card Debt in 2017

drowning in debt

 

As of November of last year (2016), outstanding American debt is over the $14 trillion mark. A large chunk of this debt comes in the form of credit card debt. Did you know that, based off estimates, if you split the total credit card debt among all Americans it would come out to almost $16,000 per person? The total tally of United States credit card debt is currently about $729 billion. As the millennial generation progresses, we’ve seen a decrease in overall credit card ownership. But this decrease does not coincide with a decrease in debt. The bad spending habits of Americans remain the same, if not worse, than they were in generations past.

According to studies, around 174 million Americans own at least one Credit Card. These days its almost required to have at least one credit card to be able to make some of the more major purchases in life. Having a credit card allows you to build up your score which will then help you with some of the following big life moments:

  • Buying a Home
  • Buying a Car
  • Getting Insurance
  • Securing a job in the finance sector

Who Owns The Most Credit Cards?

Various studies show that baby boomers are the biggest users of credit cards owning an average of almost 3 cards per person. Interestingly enough, adults with an annual income of over $75k are also some of the largest users of credit cards. In addition, the more recent the generation, the less credit cards are used. Almost as if newer generations are “shunning” credit cards for what they have done to generations before them.

Credit Card Debt

Total credit card debt has actually been steadily decreasing over the last 8 years. Despite this, the average American household owes almost $17,000 in credit card debt. It’s easy to see how one could be overwhelmed with trying to attack their debt problems when it is clearly a HUGE problem for people. A lot about credit card debt is covered in a fantastic documentary called “In Debt We Trust”, which can be watched for free on youtube:

How Much Should You Pay Monthly

An extremely important subject to think about if you are carrying significant debt is how much you should be paying down monthly. Many Americans think it is okay to just pay the minimum balance on their credit cards. While this allows you to continue with your comfortable lifestyle, this is also the fastest way to dig yourself into a financial ruin. Continuing to pay only the minimum will eventually have you not even paying off the interest you accrued against yourself each month which will lead to debt growing until you break the habit. Try out Credit.com’s Credit Card Payoff Calculator to figure out how much you need to be paying in order to pay of your card in the time frame you would like to set for yourself.

Attack Your Credit Card Debt From All Angles

When it comes to getting in front of your debt, you should come at it with everything you have! These are some great tips for attacking your debt:

  • Start a budget. You can use an online service or just simply create an excel spreadsheet or pen and paper. Set a category in your budget for rewarding yourself if you stick to the rest of the budget requirements.
  • Cut back on your monthly expenses. Reduce bills by cutting back on your big phone plan, become a cable cord cutter, and stop going out to lunch at work every day.
  • Consult with a financial adviser to find out how you can possibly bundle your debt and reduce interest rates at the same time.

Get Help From a Credit Repair Company

Did you know that you can actually negotiate with lenders to reduce or forgive some of your unpaid debt? You can actually get negative marks on your credit report for things like missed payments removed if you go through the proper channels. While you can certainly attempt to do this on your own, the easiest way is to consult with a professional who does this kind of thing on a day to day basis for clients. There are credit repair companies that are entirely dedicated helping you revive your credit score through numerous methods.

These agencies will typically handle all of the stressful parts of negotiating with lenders and will help you get started on the road to financial independence and freedom. Outsourcing these tasks to a reputable company, such as Lexington Law, can help you to put your mind at ease while you keep up with your normal daily routines. They will also provide you with status reports every step of the way so you can feel as involved as you’d like to be.

DIY Credit Repair

If you’re one of the brave folks who wants to attack the problem on your own, then these tips can help you get the job done:

  • Scrape together the biggest chunk of savings you can and pay off a big part of your debt right at the beginning. This shows initiative and can help with negotiations with lenders. They will see that you are serious about getting on the right track and will be less inclined to ship off negative items to your credit report.
  • Always ask to speak with “the boss” or a supervisor. The first person you get on the phone usually can’t do much for you. Escalating your case quickly will help you save time and avoid getting the runaround.
  • Know that the process takes time. Credit repair can take weeks, if not months to achieve. Negotiations go back and forth, usually through letters in snail mail, until both sides have come to an agreement.
  • Always get your agreements in writing. Never accept a verbal agreement as law. If you don’t have it signed on paper, it isn’t real.
  • Be honest with how much you can afford to pay. You don’t want to over commit and then not live up to your end of the bargain. Creating a careful budget will help you realize how much you can afford to be putting down each month
  • Be prepared to be intimidated. Ever had a collections agency harass you for money? The same tactics are used often in these negotiations. Don’t let anyone push you into something you are not comfortable with!

Don’t let credit card debt consume you. Credit Cards can be one of the most useful tools in life and, if used right, can even make you money through credit card rewards. Use the tips in this article to pay off your debt, and then learn how to make credit cards work for you!

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