Arizona residents may not be aware of the best ways to reduce debt. Consolidating debts and cancelling credit cards can help, but if certain precautions aren't taken, the result could be more harmful to a credit score in the end. It is possible that individuals attempting to consolidate their debt may be close to making their debt problems even worse. Pinpointing what the goal is when choosing to consolidate may help to avoid pitfalls.
Arizona residents who owe thousands of dollars in credit card debt are not alone, according to a recent analysis of Federal Reserve statistics and government data. As of December 2014, the average household in the United States has $7,281 in outstanding credit card debt. When the households without any debt are taken out of the equation, the average household owes $15,608 on credit cards. In total, Americans owe approximately $881.8 billion in credit card debt as of September 2014.
Arizona residents with a lot of credit card debt may feel overwhelmed by what they owe. However, there are some important things to keep in mind that could cause consumers to breath a sigh of relief. The first thing that all debtors should know is that they will never go to jail for nonpayment of a debt. Although there could be some legal repercussions for missed payments, none of those penalties will ever be time behind bars.
Americans over the age of 60 owe $43 billion in student loan debt in addition to an average of $5,347 in credit card debt. These obligations may make planning for retirement difficult. However, there are ways that older Americans can find help dealing with their debt. For those who have taken out student loans to pay for their child's education, it may be possible to ask those children to assume more of that obligation.
As Arizona residents may know, paying the minimum amount due on a credit card balance may be counterproductive. While there are times it might not be possible to pay more, the amount of interest paid on credit card debt may approach the original amount owed when a person pays the lowest amount possible. Hypothetically, someone with $18,000 of debt at approximately 18 percent interest paying about $400 per month would take about 76 months to pay it off. Additionally, the individual would pay about $12,200 in interest on the original $18,000.
Arizona residents who are dealing with credit card debt may be interested in statistics about American credit card debt. Determining the exact number poses some problems, however. While many different companies gather data and attempt to determine the average American's credit card debt, the answer is not that simple.
Just like taking a medication, relying on credit cards can result in side effects for their users. One such effect is assuming that a person can live a lifestyle that he or she cannot afford. Once the amount of available credit runs out, the borrower may feel as if he or she is downsizing their lifestyle, which can lead to disappointment.
Arizona families who find themselves overwhelmed by credit card debt are most likely not in that position due to carelessness or ignorance about finances. A recent survey reveals that people with credit card debt are often there due to turning to credit to pay for necessities, and they tend to spend less and budget more than people who are debt-free.
It has to come to where Americans are now willing to admit their weight than their credit card debt. The results of a recent survey show that 40 percent of the respondents are more ashamed of the amount of debt on their credit card than they are of how much they weigh or their age. Second to credit card debt is the credit score. Less than 15 percent of those surveyed said that they are embarrassed by their weight. The survey was conducted by the National Foundation for Credit Counseling.
Experian, one of the top-three credit-reporting companies in the nation, released a study exploring how baby boomers in Arizona and across the nation depend on credit compared with other age groups. It found that millennials struggle the most with debt and managing their money.