The Hidden Costs of Credit Card Debt

In order to be able to care for your finances well, it is very important to learn the facts about how people get into and out of credit card debt. This will enable you to better prevent credit card debt from stacking up around you.

Credit Card Statistics: The Facts

The facts about credit cards and credit card debt should have you seriously considering charging just any old purchase you make. Statistics show that the average card has a balance of $1,000, meaning that it would take twenty-two years to pay off that debt while making minimum two percent monthly payments. As those twenty-two years pass, interest charges will add $2,300 onto the original $1,000. That means that you would end up paying more in interest charges than you did on the purchase itself.

A typical American family is currently about $8,400 in debt. Even an entire lifetime of minimum monthly payments of two percent will not be enough time to pay off that amount of debt once you tack on the interest charges that will be accrued. You should keep these statistics in mind before you rush to slide your charge card at the store.

You will be in a better position to prevent yourself from getting overwhelmed with credit card debt if you know the facts about how credit card debt happens to people. Unfortunately, it is all too easy to get stuck in debt. For that reason, it is extremely important to try to use the facts about credit cards to help you manage impulsive spending tendencies.

Another fact about credit card debt is that you should pay more than your minimum monthly payment if you plan on really staying out of dangerously high levels of credit card debt. Only make purchases that you know you will be able to pay for in their entirety within a couple of months.

Credit card debt becomes especially serious when you realize that many Americans are in the habit of spending more money with their credit cards than they earn in an entire year.

By investing just a little bit time in learning the preventative steps that you should take to keep yourself debt free, you will save yourself from experiencing many of the problems associated with credit card debt and enable yourself to make wise choices financially.