10 Ugly Truths About Credit Cards

Credit card debt is one of the most difficult financial obstacles to overcome – interest rates are high, minimum payments barely scratch the surface of the actual debt, and it’s just so, so easy to fall into the trap you set for yourself whenever you use your credit cards without having a real plan for paying them off.  Unfortunately, the ugly truth about credit card usage has only gotten uglier in the past few years.  Not only have interest rates risen, but credit card use itself has tripled, and there doesn’t appear to be an end in sight.

Here are just a few of the down and dirty truths about credit cards and the debts we carry… and you might be surprised at just how much you don’t really know!

1. Nearly Half of the Population is in the Same Boat You Are

That’s right, you’re not alone.  Nearly half (46%) of all adults carry a balance on their credit cards from month to month, and since interest rates rarely drop, we’re all paying a premium for those purchases we made on that card.

2. It Takes Years to Pay Off Some Balances

If you’re like most people, and there are months when you can only pay the minimum payment, it can be very difficult to pay your credit card balances in full, ever.  For example, if you carry $3,000.00 in debt, at 17% interest, over time, your interest charge can easily amount to another $3,000.00.  That’s DOUBLE your initial balance – take a look at how much of your monthly payment actually goes toward the principal.  You might be sick.

3. Americans Aren’t Paying Off the Balances

Even though we’re really good at spending money, it turns out we aren’t nearly as good when it comes to paying the balance off.  In fact, for every dollar on average that we pay off, we’re adding another $2.65 in new debt.  It doesn’t take a genius to figure out that this cannot continue indefinitely.

4. The Average Household Credit Card Debt Is $5,700 

Even though the overall economy has improved significantly, the average household still carries around $5,700 in credit card debt, and are still unable to pay off much of that debt.

5. Interest Rates Are Not Coming Down

Even though the economy has improved, and mortgage rates, car loans, and other types of loans have low interest rates right now, most credit cards average at or above 16% interest.  Make just one late payment, and that can jump to 30% (or higher).

6. Just One Late Payment Will Damage Your FICO Score 

Even though it’s better to pay late than not at all, making just one payment that is more than 30 days past the due date can really harm your credit score for a very long time.  Payment histories stay on your credit report for up to seven years and can cause your score to drop significantly.

7. Baby Boomers Have the Least Amount of Credit Card Debt 

Perhaps it’s because baby boomers are aging, but the least amount of credit card debt belongs to the Baby Boomer Generation, while Gen X owes the most.  Born between 1967 and 1981, the average Gen Xer holds a credit card balance that is nearly $8,000. Even more telling, credit scores have historically dropped lower with each successive generation, meaning the successive generations will likely carry a larger balance than the Gen Xers.

8. 20% Of Americans Have More Credit Card Debt Than They Have In Savings

Even though it’s recommended that we all build an emergency fund that will cover three-to-six months of living expenses, most people have less than $1,000 in savings, and another 12% don’t have any emergency savings at all.  That means an emergency can quickly put most people into credit card debt.

9. Women Carry Less Debt Than Men 

Even though women are the “shoppers,” men actually carry more credit card debt, coming in at an average of $7,407 vs. women, who carry about 22% less, or $5,245.

10. Most of Us Will Die Carrying Credit Card Debt

Approximately 65% of Americans will owe credit card debt up to the day we die.  That’s more than those of who are not expected to leave this earth without a mortgage.  The average debt, which is more than $4,000, also leaves a legacy that family members have to deal with.

In closing, understand that credit card debt is an ugly problem that we Americans have yet to take control of in our own lives. But, it doesn’t have to be the norm – not if you take action now.  Control costs where you can, pay as much as you can on those balances, and stop the cycle before you find yourself struggling. 

Dramatically Improve Your Finances

Want to dramatically improve your overall financial picture?

While it does take a lot of restraint, patience, and time to make significant financial changes, you have to remember that, when it comes to your money (and your credit score), it’s a lifetime journey.  Yes, there will be some unexpected curves, a few peaks and valleys, and likely a few bumps along the way, but if you do your best to stay on track, you will eventually find that financial security is possible regardless of your income level.

Here are our top five recommendations for improving your finances:

Manage Your Credit Cards Wisely

With interest rates rising, credit card debt becomes much more expensive, even for those of us with excellent credit.  The easiest way to manage your credit cards is to use them sparingly and pay off as much as you can every month.  Balance transfer cards are an excellent way to lower your interest rates and free up more cash to pay down the debt.  Just be careful – too many credit inquiries can hurt your credit score and if you don’t get the balance paid off before the promotion ends, you could end up paying interest from the time you transfer the balance!

Pay Off Your Student Loans Sooner

Let’s face it, almost no one can afford to go to college without some type of student loan, so there are plenty of people out there struggling with student debt, and it’s keeping an entire generation from buying their first home, their first new car, or in some cases, moving out of their parents’ home.  If you’re one of those whose student debt is holding you back, then you need to make a plan to pay off your student loans.  Start by paying extra every month if you can afford to, either write a bigger check or have your employer do an automatic payroll deduction that goes straight toward your college repayment.  You’d be surprised at how quickly you can do this if you just set your mind to it.

Make a Savings Plan and Stick to it

Did you know that more than half of the people in this country essentially live paycheck to paycheck, with little or no money saved to cover those unplanned emergencies?  What about you, how much do you have in your savings account?  Do you even have a savings account at all?

Although it seems impossible at first, you can save something if you try hard enough.  The first thing you have to do is take a long hard look at what you’re spending… Do you really need that $5.00 cup of coffee in the morning?  Can you skip that expensive dessert when you go out to dinner?  Do you really watch all 700 of the channels that you pay for each month?    Once you identify areas where you can reduce spending, put the amount that you’re saving directly into savings and resist the urge to spend it on something else.  Remember, if you lived without spending that money on something else before you had the extra money in your budget, chances are you can continue to live without it.

Don’t Forego Saving for Retirement

When you’re young, retirement seems like a lifetime away, and it’s really easy to tell yourself that there’s plenty of time, that you’ll save extra later, and so one.  But the truth is, if you’re not saving now for retirement, you likely won’t save enough later, either.  And one day, you’ll “wake up” and realize that you’re not going to be able to retire unless you do something drastic… trust me, that’s not a good feeling.

Instead, start now.  Join the 401(k) at work and make sure that you’re taking full advantage of the employer’s match if there is one, if not, put money into the account anyway and increase the contribution as often as you can.  Retirement really is closer than you think.

Get Professional Help

Have questions you can’t answer?  Looking for sound advice on your budget, your credit report, or your retirement plans?  Don’t hesitate to seek the advice of a trained professional when and if you need it.  It’s worth every penny spent in the long run!


The Best Way to Pay Off Your Credit Cards

Even those of us with great credit can sometimes get carried away and end up with too much credit card debt… debt that saps your monthly budget and can take years to pay off.  But, since debt consolidation companies can sometimes cause your credit score to take a nosedive, you just keep paying those minimum payments and never seeming to make any real headway on your bills, right?  Wrong.  There are some really good options for people with good credit scores!

A personal loan is a great way to pay off credit card debt.  With a personal loan, not only can you pay off those credit cards, but you’ll lower those budget killing monthly payments and save thousands on interest over the course of the loan.

Pay Off Those Credit Cards

January is one of the most financially depressing months of the year for nearly all of us… I mean, let’s face it.  The holidays are now long gone, it’s not quite time to file those income tax returns (but you’re faithfully gathering those documents), and literally all of those credit card bills from Christmas are rolling in!

 Who doesn’t dread opening those monthly credit card statements?

As you go through those monthly bills, you begin to realize that you’ve not only overspent on Christmas, but you’re going to have to pay an incredibly high amount of interest in order to get them paid off.  And you realize just how much that interest is going to take out of your monthly budget, not to mention how long you’ll be paying it!

With a personal loan, there’s a better way.

If your credit card debt has overtaken your financial life, ruined your monthly budget, and left you strapped for cash, then it’s time to make some changes in your spending habits, and simplify your financial life.  Instead of paying minimum monthly payments for literally years and years, why not pay off all those credit cards and have just one simple monthly payment?

A personal loan just might be the best financial decision you’ll make this year!

Think about it… with a personal loan, you can pay off those high interest credit card bills, potentially saving hundreds or even thousands of dollars in interest, and give yourself a little financial “breathing room” each month.  And it’s as easy as filling out an online application.

The Best Way to Pay Off Credit Card Debt

Now that the holidays are officially over, many of us are beginning to see those huge credit card bills roll into our mailboxes, and we’re starting to wonder how we’ll ever get them all paid off… Are you drowning in credit card debt, too?  Maybe you overspent during the holidays or you’ve had some unexpected expenses?  Or maybe you’re like a lot of us and you’re tired of spending tens or hundreds of dollars every month paying only the minimum payments on your credit card bills only to see the balance decrease by as little as two or three dollars a month!  Sound familiar?

You know, there is a way to payoff your credit card debt and get your finances back on track without ruining your credit score!

With a personal loan, you can pay off ALL your credit cards AND keep your good credit score!  That’s right, you combine all of your credit card bills into one lower interest loan with one monthly payment, so you’ll save money both on the interest that you’re currently paying the credit card companies and on the amount of money that you pay out each month!

And today’s personal loan companies are easy to work with, easy to understand, and with all of the learning tools on their websites, you might just find that your finances get back on track much faster than if you just borrowed the money and paid on your personal loan!   That’s right, you can learn how to save for your first house, how to financially survive a divorce, and even how to make a little extra money every month on the internet.  Interested?


The Best Way to Get Out of Credit Card Debt

Trapped under a staggering amount of credit card debt?  Barely able to make those monthly minimum credit card payments?

Even if you’ve got excellent credit, there are times when you can still get in way over your head when it comes to credit card spending, and once you get in too deep, it can be nearly impossible to get out.  Fortunately, there’s a way not only to get out from under those high minimum payments, lower your interest rates, and even raise your credit score!

With a personal loan, you can combine all of your credit card debt into one easy monthly payment that you can pay off in as little as two years or less, with a fixed, lower interest rate than you’re likely paying right now, and you might actually raise your credit score in the process!  Even better, the whole process from completing the application to seeing the money in your account once you’re approved normally only takes a couple of days.  That’s right… you are just days away from getting out from under that debt!