How to get yourself out of Debt
A telemarketer phoned Paschall at home the other night just as his family was sitting down to dinner. The sales pitch for the investment opportunity of a lifetime began: “Do you know how you can make anywhere from 14% to 40% on an investment in today’s economy?”Before hanging up, Pashall replied,
“YES, by paying off my credit cards!”As countless numbers of consumers will attest, it is very easy to succumb to the siren song of ready credit availability. Increased competition for your credit card business has brought forth an ever-widening array of complex and confusing products. We are deluged with online, television, radio, newspaper, telephone, mail, and
“take-one” credit applications.
“On-the-spot” financing and immediate credit approvals give millions of us instant access to credit. Some offers come with attractive promotional rates; others provide cash-back bonuses; still others carry frequent flyer miles or credits towards purchases. Some offers have no or low annual fees but charge higher interest rates; others charge annual fees but have lower interest rates; many cards now have tiered “penalty rates” where the interest rate jumps significantly for late or missed payments. Current customers see credit card limits automatically increased, required monthly payment amounts lowered, and convenience checks that hype the ability to transfer balances, pay taxes, or finance children’s educations.
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If you have been living on plastic to make ends meet YOU ARE NOT ALONE!
Consider The Following : |
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• The typical American household has 11.5 bank & retail cards;
• The average credit card debt was $8,367 per household in 2001;
• The average credit and retail card interest rate is nearly 19%;
• The typical credit card balance will take 25 years to repay when making only the minimum monthly payments;
• The total US outstanding consumer debt was $265 billion in January 1979 and rose to $1.713 trillion by June 2002; |
• The typical American owes 14.5% of his or her disposable personal income (take-home pay after taxes) in consumer debt; not including home & auto debt.
• Personal Bankruptcies were at an all-time high of 1,505,306in the year ending June 30, 2002, up from 872,438 in 1991.
• Americans have gone from saving 10% of their incomes in the 70s & 80s to saving 3.4% of their incomes in July 2002. | |
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(1) Sources: Federal Reserve Board, US Department of Commerce, CardFacts, American Bankruptcy Institute |
