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[A837]Average Credit Card Debt

by Lisa Max, Lis

Consider these facts:

The most (general purpose) credit cards. (cards in circulation during 2008)
1. Chase - 119.4 million
2. Citi - 92 million
3. Bank of America - 80.2 million
4. Discover - 48 million
5. American Express - 46.5 million
6. Capital One - 46.3 million
7. HSBC - 38.8 million
8. GE Money - 27.2 million
9. Target - 23.4 million
10. Wells Fargo - 17.3 million
(Original source: Nilson Report, February 2009)

That's a lot of credit cards! The truth is that the average American household with at least one credit card has nearly $10,700 in credit-card debt, according to http://CardWeb.com. The average credit card interest rate is typically in the mid teens, if not higher, with some APRs as high as 30%! Given this scary fact, you do want to be aware of how to best reduce your average credit card debt as quickly as possible.

Summary of the Best Ways to Reduce Average Credit Card Debt:

* Use debt for the right purposes such as mortgages and student loans
* Pay off higher interest credit card debt first
* Pay more than the minimums on your credit card payments
* Pay attention to what you are spending and cut back where you can
* Borrow from lenders with the best interest rates
* Build up savings as a cash reserve for unexpected expenses
* Pay off higher interest debt before paying down your mortgage
* Seek professional debt help if you need it

Tips to Lower your Average Credit Card Debt

Not all debt is bad. Believe it or not, in some circumstances, having some debt is actually a good thing because it can help you have a good credit rating. This is important for when you do need credit for things like mortgages or student loans.

Borrowing money for a mortgage or for college education is a good use of loans. Make sure you only borrow within your limits so you will be able to repay your loans. Also, shop around and find the best loan terms and interest rate. Another benefit of a mortgage loan is that often the interest is tax deductible.

Beyond home loans and student loans, most revolving debt isn't smart. Don't fall into the habit of using credit cards to pay for consumables, such as meals and vacations, if you can't afford to pay off your monthly bill quickly. It doesn't make sense to pay interest on these things, and by using a credit card for living expenses, you will accumulate more debt fast.

Always put aside some money each payfor these necessary items and pay off your bills quickly. If there's something you have been wanting to purchase that exceeds your monthly budget, save for it over a few paychecks so that you will be able to avoid putting it on a credit card.

Get control of your spending. It is too easy to get into debt and acquire thousands of dollars without even realizing what happened. Don't make this mistake or it can take a very long time to dig yourself out and pay off the credit cards due to the interest payments.

Keep track of your spending and or collect receipts. If you know how much you are spending, you can raise awareness of where your money is going. Reduce spending on unnecessary items and save the money or use it to pay down other debt faster.

Pay off highest-interest rate cards and loans first. If you really want to get out of debt faster, focus on repaying those cards and loans that have the higher interest rates. Also, pay at least the minimum payment, if not more, on your other debts. Take the cards in order and pay them off one at a time from highest interest rate to lowest and as soon as one card is paid off, start on the next one.

Don't pay only the minimum payment. When you only pay the minimum amount due on your credit cards, you will be lucky to pay off more than just the interest and it will take a very long time to pay off that bill. Plus, you will spend a lot on interest payments over the term of the loan.

Borrow from the right places. While you may be tempted to borrow money from your retirement plan or take out a home equity loan to reduce your average credit card debt, this can also be risky. You can pay high penalties and taxes on withdrawals from a retirement plan, and if you can't repay a home equity loan it is possible you could even lose your home.

Prepare for the unexpected. It is always a good idea to set aside some savings in reserve in case you have an unexpected life event or emergency. For example, a major car or home repair, or an illness can wipe out your savings fast.

Don't assume you should pay off your mortgage first. You may want to pay off other debts faster than your mortgage because it is typically a lower interest rate. Also, they often allow you to deduct at least some of the interest from your taxes. If your mortgage has a high rate, try to refinance it instead.

Get help when you are in trouble. If you find yourself with a lot more debt than you can handle, then get some professional help. There are many helpful debt management and counseling agencies that may help you consolidate your debt. They can also help you understand and better manage finances. Just do your research to select a reputable company.

These average credit card debt reduction tips are great techniques that you can start applying today, and take charge of getting out of debt fast!

As long as you have the willpower to apply these techniques, you will begin to relieve the pressure of too much debt.

Many people have far too much reliance of credit these days. They seem to have forgotten the concept that you can only have something if you can afford to pay for it. The on demand, instant gratification society that we live in might explain why this idea has taken hold but it does not really excuse it.

Don't get me wrong, using credit wisely is a good idea and is the basis for achieving wealth. However people rarely used credit cards for this type of purchase. Credit cards are used for throw away items or goods and services that depreciate over time. This is partly because credit cards are marketed as a convenience. and partly because people have no discipline over their finances.

The consequences of this on the American average credit card debt is to increase it at an astonishing rate. This has effects, not only on the individuals that get into this debt but the society as a whole as it impacts on the economy and the costs of banking and credit services. This article will cover how to lower the average credit card debt in the US and many other countries that have had easy access to credit.

The importance of the average American credit card debt figures can't be overstated. It is an indication of our reliance on credit. It may not be relevant to someone with no debt but it does influence the banks and the economy. It is a statistic that helps to set policy in banks, credit card companies and governments.

So if the average credit card debt is rising and shows no sign of abating then it is really the time to consider modifying spending habits. Give up cheap, easy credit and lower debts. Learn to live within your means and only buy things that you can afford

Further, it is safe to say that the banks will start to become stricter on their lending policies. They will also plan for more defaulting payments which inevitably means that financial services will become more expensive as they pass these debts onto the customers. This makes it harder for the individual and the general economy.

Get a grip on your spending.

You need to get a stable financial health by reducing debts however thsi will never happen unless you spend less than you earn. This is the first problem you have to deal with and it is often very hard to solve when you have large monthly debts to be paid.

If you have existing debts like credit card debts then set some guidelines on using credit. Limit the number of credit cards you have. Start this off by consolidating all debt on one credit card. Select a card that has an interest free introductory bonus period or on balance transfers. This can help you to start reducing your debt without interest adding to the debt.

It might not be glamorous but learn to live within your means. If this means a large proportion of your monthly income goes on paying off debt then so be it. Don't cut your nose off to spite your face. You still have to live but cut out the non essentials like take away foods, taxis. No, you can't go out every other night. Focus on the essentials that are needed to live and paying off your credit card debts.

This will not be an overnight fix. It will take time to reduce your debt but it will be well worth it when you are debt free. Freedom from debt gives you far more control over your life and puts you on a sounder financial footing. The more people that do this will see the American average credit card debt get smaller. This is good for the economy and the individual.

Article Source : No Interest Credit Cards

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Both Lisa Max & Adrian Fletcher are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Lisa Max has sinced written about articles on various topics from Credit Cards, Debt Reduction Consolidation and Debt Reductions. Lisa Max will show you various methods to get out of debt. This is a well researched website, providing information about . As a long time in. Lisa Max's top article generates over 33100 views. to your Favourites.

Adrian Fletcher has sinced written about articles on various topics from Information Technology, Cure Anxiety and Home Improvement. Find more at bankruptcyfixup.com, including. Adrian Fletcher's top article generates over 27100 views. to your Favourites.