Over
20% of Americans Have More Credit Card Debt Than Savings, by Paul-Martin Foss,
8/13/18.
It’s
no surprise that Americans aren’t the best at saving money. It’s drilled into
our heads from an early age through advertising and peer pressure that
spending money is the way to happiness. New things will keep us
happy, allow us to keep up with the Joneses, and help strengthen the economy,
or so we’re told. And that’s why Americans continue to accumulate debt at an ever-growing rate. Despite the fact that many
Americans realize that they need to keep a good amount of emergency savings on
hand, 21% of Americans surveyed stated that they have more credit card debt than they do
savings. That’s a
sobering statistic.
One
of the many problems with maintaining credit card debt is that the interest payments will
accrue and grow larger over time. If you only make the minimum payment, or if
you consistently keep a balance on your card, you’ll be hit with interest
payments on every purchase you make. That can rack up quickly, meaning you’ll
pay far more than the sticker price for every item you buy. Is that really worth
it?
And
if your credit card debt exceeds your savings, you’ll be in a tough situation
if you lose a job, face a medical emergency, or find yourself in some other
situation in which you have to spend a good chuck of money. If the US economy
ends up in another financial crisis in the next few years, all those households
that have accumulated so much debt will find themselves in a lot of pain if
they lose their jobs and fall further behind on their debt.
That’s
why it’s never a good idea to rely on credit to get you buy. In an emergency,
sure, having that line of credit can help. But you need to pay it
off as soon as possible. The two principles that apply to most credit card
purchases are: 1.) If you don’t have money in the bank to pay for it, don’t buy
it; and 2.) Pay off your credit card every month. Following those two simple
rules could save millions of Americans a lot of heartache.
Norb Leahy, Dunwoody
GA Tea Party Leader
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