What You Should Know about Debt

Are you suffering from debt denial? A common misconception among people with debt is that their situation isn't "that bad." Compared to other individuals, they may even believe they don't have a debt problem. The fact remains - any amount of debt is bad and should be properly addressed. Here we've compiled some important facts that everyone should know about debt:

Debt

• More than a quarter of consumers find it more difficult to pay off debt today than anytime before.
• Over 10% of Americans have debts that have gone into collections.
• About 40% of families spend more money than what they earn annually.
• 8.3% of people with credit card debt owe more than $9,000.

Credit Cards

• Credit card companies charged more than $40 billion in fees alone last year.
• Nearly a quarter of Americans have maxed out a credit card before.
• 75% of college students have a credit card and the average student carries a balance over $2,000.
• More than half of all people who use credit cards carry a balance each month.

Interest Rates

• Due to high interest rates, the average purchase on a credit card costs 112% more than if it were paid with cash.
• A typical family pays over $1,000 in interest alone on their credit cards.
• The average APR on a credit card is over 18%

Bankruptcy

• Over 1.5 million households file for bankruptcy every year.
• Adults aged 35-44 have the highest bankruptcy rates, while those aged 25-34 have the second highest rate.
• 98% of all bankruptcies are filed by consumers, businesses represent the other 2%

With all the different debts, believe it or not there is such thing as a good debt. Make sure you know the difference between good vs. bad debt.