Consumer credit cards are currently reaching new records, making us wonder if a new recession is just around the corner!
According to The Motley Fool, a latest credit card study, conducted by Wallet Hub and based on data from the Federal Reserve, people are back to the pre-recession bad habits when it comes to credit cards. Specifically, the average debt is going up higher than people are able to pay it and, at this rhythm, the total credit card debt could reach $1 trillion by the end of 2017!
Remember the good days?
Almost 10 years ago, when the recession started, credit card debt was a highly important factor. U.S. citizens were ignoring savings accounts and they were actually spending more than they were earning. This happened because they believe that the stock market, as well as the value of their homes, would keep rising, allowing them to put off the day of reckoning indefinitely.
Of course, we all know what happened: the stock market crashed, housing markets went down as well and people ended up with debts they were unable to pay.
Debt must be kept under control!
If you do have a bit of debt, though, there’s no reason to panic that much. Good debt, such as a mortgage, can actually be a financial blessing, for example!
In order to avoid stocking up some astronomical debt numbers, the whole secret is to keep it as near to zero as possible and minimize your other forms of debs, which will allow your income to go toward current expenses!
On the other side, if you already own a big sum of money and feel like you’re going to be a part of those who could help the total credit card debt reach $1 trillion, there’s still hope for you!
Relying on balance transfer can make debt payment easier, while making this your top financial priority is another important change you can make! After all, there’s no need to spend money on investments that can help you earn around 7% per year, if you’re paying 15% per month on your credit card debt…
