A major credit rating company, Equifax, just announced that American credit card debt statistics are improving a little, reports the Atlanta Business Journal. In fact, about 60 out of the top 100 metropolitan areas saw declines in percentage of income owed to credit card companies.
However, the company was quick to warn that while total consumer debt in the USA has declined from $12.4 trillion in October 2008, citizens still owe more than $800 billion just on credit card debts.
Avoiding debt is one of the best ways to prepare for a secure financial future. Many consumers, though, risk financial freedom by falling into credit card debt.
If used properly, a credit card offers many advantages, such as protecting purchases, building credit, and it makes it easier to purchase expensive items without carrying cash. When used improperly, however, a credit card functions like a high interest loan rather than as a cash substitute. Many consumers learn that as debt builds, it becomes increasingly difficult to get out of debt. Low monthly payments, usually only 2 to 3 percent of the balance, and high interest rates keep consumers in debt for many years.
Thankfully, credit card debt is one of the few types of debt you can accrue that can be discharged through the course of a bankruptcy. That is not the case with student loans, child support debt, or tax debt.
The best thing to do with credit cards is to use them wisely. However, in the event that such a course of action goes awry, you should consider a bankruptcy.
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