In our last post, we talked about avoiding debt in the first place. This is a means of never having to deal with a bankruptcy filing, which is obviously the preferred way to go through life. However, not every person gets to live that life. Some honest, hard-working people fall on hard times, and when these things happen they will be in need of relief measures that allow them to get out from underneath their debts.
A lot of the focus of this blog is on bankruptcy, meaning that we are talking about a legal process that already assumes you are buried under a lot of debt. But of course, there is something even better than filing for bankruptcy to clear out your debts, and that is never being in debt in the first place. How do you achieve this?
The Federal Reserve Bank of New York released new information recently that shows that American households have now surpassed the 2008 level of debt. In that fateful year, households accumulated a peak of roughly $12.68 trillion in debt. Today, that number sits around $12.73 trillion, with about 71 percent of that debt being tied up in housing itself (mortgages and home equity loans). The remaining 29 percent of the debt was listed as student loans (10.6 percent), auto loans (9.2 percent), credit cards (6 percent) and "other" (2.9 percent).
Credit cards are tempting and devious tools. They seemingly offer "free" money, but of course that isn't true. It is simply that a credit card offers us the chance to make a big purchase when we don't necessarily have the cash on hand for it, delaying the moment when we actually have to pay the piper. This can lead to people making big purchases they can't readily afford, and it can lead to us giving in to our worst impulses -- impromptu buys and expensive purchases.
The Federal Reserve recently released a report that unveiled that Americans owe more than $1 trillion in credit card debt, collectively. While this may sound like an economic boost on a national level -- people are buying big items and using their credit cards, after all -- it can wreak havoc on an individual's person's financial situation.
Sure, there are things in life that are simply annoying. They bug you, like nails on a chalk board. Maybe you even think they should be outlawed. But because this is a free country and you might be dealing with a mere pet peeve, there is little you can do to address the matter.
Many people in Louisiana who are struggling to make multiple credit payments think that consolidating their credit card debt is the answer. After all, it appears to be a good alternative to keeping up with different payment due dates and amounts each month. As attractive as consolidating all your credit card bills into one payment may seem, there are some things you should know. Depending on your specific financial situation, it may or may not be the best option for you to get control of your credit card bills.
According to Bankrate.com, the average credit card debt per family in Louisiana is almost $5,000. Did you know that if you only make the minimum payment each month, it would take nine years to pay this off? And that is if you do not incur any other debt during this time. Another poll found that credit card debt is the number one taboo subject, above discussions about salary, politics and your love life. Most people are trying to cope with debt, but no one wants to talk about it.