Top Three Reasons Americans Rack Up Such Enormous Amounts of Debt
Debt from credit cards and other unsecured debts have come to be a severe problem for the greater part of families in America . Individuals have become to accustomed to just utilizing their plastic card to get whatever they want, whenever they want it, without really having the money to pay for it. Below I will list the top reasons that Americans end up becoming so stuck with credit card debt.
1. Buying Impulsively and Poor Spending Habits!
Buying on impulse shows lack of self-discipline. People will basically come across an item in a shop and pay for it on their credit card, because they just can't wait to own whatever item it is they bought, regardless of whether they actually have the income for it then or not. Credit cards feed the fire of buying on impulse that is what the cards are there for to satisfy our need for instant gratification. You know the old adage "patience is a virtue" if some debtors adopted that standard they would not be in so much debt.
Weak spending behaviors run along the same line as impulse buying. Some debtors just pamper themselves far to often in life. A good example might be, someone might go to a four star restaurant, and instead of buying a chicken sandwich and chips, they order the prime rib, the pre meal appetizer or two, the drink special, and the dessert special. And of course charge it on their plastic. Don't take me out of context every once in a while splurging isn't bad, but for some people it's an everyday way of life. And these undisciplined spending behaviors can blow up to a mountain of debt extremely quick.
My Advice: Next time you are at a store, any type of store, and you are intending to make a purchase with your credit card. Look down at the items you are about to purchase and think to yourself 'Are these items necessary?' If you find yourself charging merchandise that is more of a want then a true need then easily put it back on the rack, and promise yourself when you have "real money" not a credit card, to come back and purchase that merchandise for yourself without charging your card. The key point here is to differentiate between wants and needs, your groceries are a need, your soap is a need, the new album is a want, the brand new pair of boots are a want. A tune up for your car is a need, a turbocharger for your car is a want.
2. Holding Too Many Credit Cards!
This is the next large problem to debtors getting into major debt problems. People basically just cannot say no to the credit card offers they receive. Debtors get these cards in the mail saying your pre-approved and your line of credit is 5k. For a lot of people this is too much to take on and they will graciously accept every card and almost instantly put them to use.
My advice: Just throw these offers away! You don't need them. Think of every one of these card offers you get in the mail as a large financial time bomb waiting to blow up. The only way to cut it off is by throwing them right into the trash bin. Learn to reject the new credit solicitations you don't need them, this cannot be stressed loudly enough.
3. Cash Advances!
This is a seriously large factor in people racking up debt. It seems just all to convenient to go to the ATM and take out cash against your card. Becoming extremely addicting to debtors and becomes a huge reason why they pile up so much debt.
My Advice: Avoid cash advances. This really is almost the same as just purchasing on your card, because you still get charged interest and pile up a mountain of debt.
Steve Bis is a debt analyst and research assistant with the US Consumer Advocate, which primarily practices in credit card debt settlement.
Published December 10th, 2007
BlinkList
Delicious
Digg
Facebook
Fark
Furl
Google Bookmarks
Livejournal
Ma.gnolia
Netvouz
Newsvine
Reddit
Spurl
Stumbleupon
Wists
Yahoo My Web