There simply is no acceptable level of credit card debt. Running a debt balance on your cards, month after month, the interest is accruing and you are paying far too much for the purchases which you make on your cards. So, if you know what's good for you, get out of debt while you still can.
The Problem with Credit Card Debt and Why it is
Important to Get Out of it While You Still Can
There are four dynamics which pose a great danger to your long-term financial prosperity. Here they are:
€ Low minimum payments
€ Very high interest rates
€ Denial
€ Societal pressures
The problem with card debt, when taken from the perspective of accruing debt, is that because of the low monthly payments and the very high interest rates, this debt increases rapidly. For many debtors, it eventually gets out of control and once out of control, it is difficult to recover from the debt cycle.
Whichever way you think about at it, debt is not a good place to be. Even if it doesn't kill you, it's an enormous waste of your financial resources. So it really is a good idea to get out of debt.
For instance, if a person owes $20,000 in card debt and their average annual interest averages out to at 18%. At 2% minimum payment (which is the industry average) it works out at $420 per month. At this rate it will take just over 7 years to repay the debt; and this is only if they do not make new purchases during the payback period. So even in the case of a debtor, who stops using their cards and simply makes monthly payments, this debt of $20,000 adds up to $35,700 by the end of that 7 year period. That's 67.5% interest. Now that is a lot of debt.
So, at the very least, why would you want to buy things today and pay for them tomorrow with an extra 67.5% in interest payments, and that's only if you do not make any additional purchases. Of course, most everyone makes additional purchases. So most debtors are adding debts every month, which means the interest keeps on adding upwards all the time.
If this is not a good enough reason to want to get out of debt, do keep in mind that even if you think you have it under control the latter two dynamics, which are €denial' and €societal pressures ', tend to lead even the most conservative users astray over a long enough period of time.
So, even if your debts are not out of control today, they can very easily get out of control. And even if they don't get out of control, as long as you are holding a balance of debt on your cards, quite simply, you are flushing your money down the toilet due to the ever present high interest rates and low monthly payments.
The Influence of Denial and Societal Pressures on Your Credit Card Debt
Denial:
It is a dynamic which makes a person shrug their shoulder and say €I'll do it someday€. However, that someday usually never arrives and meanwhile that controllable debt is rapidly becoming uncontrollable.
Also, by the time the monthly payments become expensive the debt is out of control. This makes it difficult for the debtor to get out of debt at all.
Societal pressure:
We are surrounded by financial temptations. There are so many advertisements out there telling us to buy today and payback tomorrow. The society which we live in is based upon debt. Let's face it, the banks would go out of business if no one took out any loans, and the same goes for the companies. However, how successful or unsuccessful these financial organizations are is not your concern. Rather your concern should be looking after your own financial welfare.
It is this combination, of low monthly payments and very high interest rates, denial and societal pressures, which drive the debtor into a debt spiral. Consequently, if you do not get out of debt, if you are retaining this debt from one month to the next, then a serious debt problem will arise sooner or later.
So if I Want to Get Out of Debt does
this mean I Cannot Use My Credit Card?
The only sensible use for a credit card is to use it and then pay off the bill within the 50 to 60 payback period, whereby no interest is applied. By doing this you will not be racking up debt. Furthermore, it may seem like a crazy idea to use a card in this way. However, when you think about it, living in debt is crazy idea. Just because a companies offer you easy payments does not mean that you should accept their offer. By all means use credit cards, but use them in a sensible way.
If your debt situation is not too serious, then do what you have to do to get out of it, such as budgeting, for example. Even if your debt is already out of control, then remember, it's never too late to make the necessary lifestyle changes. You can get out of debt if you really want to badly enough. In this case do some research and find a debt relief strategy which will help you to get out of debt. Then once you have freed yourself from the debt, make sure you stay out of it.
The Problem with Credit Card Debt and Why it is
Important to Get Out of it While You Still Can
There are four dynamics which pose a great danger to your long-term financial prosperity. Here they are:
€ Low minimum payments
€ Very high interest rates
€ Denial
€ Societal pressures
The problem with card debt, when taken from the perspective of accruing debt, is that because of the low monthly payments and the very high interest rates, this debt increases rapidly. For many debtors, it eventually gets out of control and once out of control, it is difficult to recover from the debt cycle.
Whichever way you think about at it, debt is not a good place to be. Even if it doesn't kill you, it's an enormous waste of your financial resources. So it really is a good idea to get out of debt.
For instance, if a person owes $20,000 in card debt and their average annual interest averages out to at 18%. At 2% minimum payment (which is the industry average) it works out at $420 per month. At this rate it will take just over 7 years to repay the debt; and this is only if they do not make new purchases during the payback period. So even in the case of a debtor, who stops using their cards and simply makes monthly payments, this debt of $20,000 adds up to $35,700 by the end of that 7 year period. That's 67.5% interest. Now that is a lot of debt.
So, at the very least, why would you want to buy things today and pay for them tomorrow with an extra 67.5% in interest payments, and that's only if you do not make any additional purchases. Of course, most everyone makes additional purchases. So most debtors are adding debts every month, which means the interest keeps on adding upwards all the time.
If this is not a good enough reason to want to get out of debt, do keep in mind that even if you think you have it under control the latter two dynamics, which are €denial' and €societal pressures ', tend to lead even the most conservative users astray over a long enough period of time.
So, even if your debts are not out of control today, they can very easily get out of control. And even if they don't get out of control, as long as you are holding a balance of debt on your cards, quite simply, you are flushing your money down the toilet due to the ever present high interest rates and low monthly payments.
The Influence of Denial and Societal Pressures on Your Credit Card Debt
Denial:
It is a dynamic which makes a person shrug their shoulder and say €I'll do it someday€. However, that someday usually never arrives and meanwhile that controllable debt is rapidly becoming uncontrollable.
Also, by the time the monthly payments become expensive the debt is out of control. This makes it difficult for the debtor to get out of debt at all.
Societal pressure:
We are surrounded by financial temptations. There are so many advertisements out there telling us to buy today and payback tomorrow. The society which we live in is based upon debt. Let's face it, the banks would go out of business if no one took out any loans, and the same goes for the companies. However, how successful or unsuccessful these financial organizations are is not your concern. Rather your concern should be looking after your own financial welfare.
It is this combination, of low monthly payments and very high interest rates, denial and societal pressures, which drive the debtor into a debt spiral. Consequently, if you do not get out of debt, if you are retaining this debt from one month to the next, then a serious debt problem will arise sooner or later.
So if I Want to Get Out of Debt does
this mean I Cannot Use My Credit Card?
The only sensible use for a credit card is to use it and then pay off the bill within the 50 to 60 payback period, whereby no interest is applied. By doing this you will not be racking up debt. Furthermore, it may seem like a crazy idea to use a card in this way. However, when you think about it, living in debt is crazy idea. Just because a companies offer you easy payments does not mean that you should accept their offer. By all means use credit cards, but use them in a sensible way.
If your debt situation is not too serious, then do what you have to do to get out of it, such as budgeting, for example. Even if your debt is already out of control, then remember, it's never too late to make the necessary lifestyle changes. You can get out of debt if you really want to badly enough. In this case do some research and find a debt relief strategy which will help you to get out of debt. Then once you have freed yourself from the debt, make sure you stay out of it.