Friday, September 4, 2009

In the News

I just read yet another article about today's economy. I try not too read them too often because after awhile they really start to repeat themselves. But this one I read was discussing credit card companies and the changes that are coming. One fact stood out to me:

The average outstading debt of American households that have a credit is $10,679. (Family Circle)

I had to read that several times. I could not believe that it is over $10,000?!?!?

That is average. And that is credit card debt, not mortgages not loans. Just credit card debt.

It reminds me of all the commercials I keep hearing about not paying back your credit card debt. It starts off something like "this is the information credit card companies don't want you to hear." And then they go on to talk about how you can get out of paying back your debt. Thes anger me sometimes because I feel that if you accrue the debt you should pay it back. I acknowledge that in some cases there are extenuating circumstances. I have a hard time believing that the average case has extenuating circumstances.

I want to make one point clear- I know that there are cases where medical bills pile up, or someone loses a job and you need the credit card to make ends meet. And there are other reasons to continue to adding to your debt. Things happen and we still need food, shelter, warmth and clothing. These costs can pile up even for the most frugal person.

But I still go back to the fact that the average U.S. household credit card debt is over $10,ooo.
I just don't understand how this happens. I am not trying to be judgemental, I just don't get it. Buying things that you don't have the money for doesn't make sense to me. Taking vacations that you cannot afford. Owning a house that costs so much each month that you need your credit card to buy groceries. It doesn't make sense.

I want to point out that if this is the average debt that many people must owe more than this. Just as many people owe less.

I hear how the credit cards comapines are to blame. And yes they have some dirty rules that they use. But no one HAS to have a credit card. And they give you rules and regulations up front. They are long and can be confusing but you have the option to read everything first. It is not a requirement in life to hold a credit card. It helps build credit yes, but you don't need to max it out. In our household we have three active credit cards. But we have a few rules about them:
Keep tract of what we spend- I balance the checkbook so Jon gives me his reciepts. We look at our balances BEFORE making major purchases
Use it for gas and big purchases but it MUST be payed off at the end of the month.
NO major purchases without discussion first
We try to save up for things that we want.
Needs come first when we can anticipate them
Stick to our budget as much as possible

Every time I read about the debt that Americans hold I am flabbergasted. I know that is a silly word but honestly nothing else explains what I feel. I

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