Credit card debt–ugh, we all hate that word don’t we? Nearly anyone can find themselves deep in credit card debt, and many people today are carrying quite a lot of debt on their credit cards. In fact, according to a 2010 survey by Federal Reserve Bank, the average credit card debt per household was a staggering $14,743. Wow.
As the saying goes, “The borrower is a slave to the lender.” Excessive credit card debt can lead you down a path of slavery. It can bind your finances, stifle your career or business, and put unnecessary strain on your family.
Credit Card Debt Causes
Credit card debt generally happens for 2 reasons: Overspending, or under-earning. Some people want to “keep up with the Joneses,” and try to buy the latest gadgets, cars, etc.–even if they can’t afford it. This is a surefire way to find yourself in deep credit card debt. In fact, I used to have this problem myself. I amounted nearly $18,000 worth of credit card debt at one point in time (most of that was due to a new car I purchased).
Luckily, I was able to “snap out of it,” and get my finances under control. In fact, I got so good at it, that I was able to eventually erase my debt completely, and start an aggressive savings plan. It has paid of well.
The other cause of credit card debt, under-earning, is a much more sad way to get into debt. In this scenario, a person working a job(s) and trying to pay the bills gets a credit card offer in the mail. They apply, and get accepted. Then something happens–they lose their job, they get hit with an unexpected expense, or something similar. Since they aren’t earning enough money (and likely don’t have emergency savings), they rely on the credit card.
But since they are already strapped for cash, they have trouble repaying it. So the debt continues, and they simply pay the minimum balance in hopes that they will recover soon. In these cases, things often get MUCH WORSE before they get better.
Are You in Credit Card Debt?
If you are in credit card debt, it is VITAL to your financial health that you get your finances under control. You are either a slave to money, or money is a slave to you. We must all be good stewards of the financial blessings we have, and we must all control the debt we have.