Debt Reduction Tactics And Home Finance Ideas

Credit Card Debt in the United States

by Beth Derkowitz

It’s no secret that credit card debt in the United States
is at an all-time high. The U.S. is a culture of spending
rather than saving and with the increasing cost of living
and the low minimum wage; it seems that no one is
invulnerable to credit card debt.
Credit cards are not meant to cause financial trouble, but
rather a more convenient way of paying off larger items and
for emergencies, but many people have turned to the longer
payment terms as a way to get the finer things in life.
Many consumers forget that credit cards are essentially
loans that need to be repaid, as opposed to being ‘free’
money.

What happens is that a consumer will charge items on the card
and then receive a bill in the mail. When they decide to make
a minimum payment, interest accrues and the next month has a
larger balance, even if they don’t pay anything more. But the
trouble lies in the fact that people continue to buy more and
more. As interest accrues, the minimum payment goes up. And
that’s when trouble starts.

If the cardholder is living beyond their means by using a credit
card, they can not pay off the interest rates as well as the
balance as quickly as they think that they will and the credit
card companies benefit. For example, an eleven dollar grocery
store bill on a credit card can take a year to pay off and end
up costing about fifty dollars when it’s finally paid off.
That’s an expensive way to eat.

And because so many people in the U.S. can not pay off their
credit card bills, their minimum payments get too high for
them to handle, so they turn to bankruptcy. In effect,
declaring bankruptcy used to mean a cancellation of your debts
and a way to start over, but it also negated your credit history
and made it harder to get loans in the future to rebuild the
financial history.

But then the bankruptcy laws changed and cardholders are now
being told to pay off parts of their debt instead of getting
that clean slate and fresh start.

The credit card debt in the United States is a recipe for
financial disaster. Because so much of the economy relies
on the purchase power of consumers, eventually the increase
in debt will lead to less ability to pay overall and a crash
in the system. With better credit counseling programs and a
system to teach people how to manage their finances, the
U.S. can dig itself out of this mess.


Beth Derkowitz recommends Find Credit Cards for finding a
MasterCard rewards credit card that’s right for you.


Keywords: MasterCard, credit card

About the Author
Beth Derkowitz, rajasthan
bethderkowitz@gmail.com
http://www.findcreditcards.org/issuer/mastercard.php here.
Beth Derkowitz recommends Find Credit Cards for finding a
free prepaid debit card.

posted by Bryon Zirker @ 1:30 PM