Top 3 Reasons Americans Rack Up So Much Debt

Author: Steve Bis

2007-12-11 Word Count: 683 Category: Personal Finance

Debt from credit cards and other debts that are not secured such as personal loans, have grown to be a severe problem for the majority of families in the United States. So many people have become to accustomed to just utilizing their plastic to get whatever it is they want, whenever they want it, without truly having the income to pay for it. Below I am going to list the top three reasons that Americans wind up becoming so swamped with credit card debt.

1. Buying Impulsively and Bad Spending Habits!

Buying impulsively demonstrates a lack of self-control. People will basically stumble across something in a store and ring it on their credit card, because they just can't wait to own whatever item it is they want to purchase, with no regard as to whether they have the money for it then or not. Credit cards feed into impulsive buying that is what the cards are there for to keep happy our need for instant gratification. You know there is a proverb "patience is a virtue" if some people kept to that standard they would not be in so much debt.

Poor spending routines run along the same line as impulse buying. Some people just pamper themselves way to often in life. For example, somebody might end up at a restaurant, and instead of getting a chicken sandwich and fries, they order the filet mignons, the appetizer or two, the drink special, and the ice cream special. And of course charge it on their plastic. Don't take me out of context every once in a while splurging isn't bad, but for some of us it is a everyday occurance. And these uncontrolled spending routines can lead up to a skyscraper of debt in a rather fast time period.

My Advice: Upon the next time you find yourself at a store any type of store, and you are going to make a charge with your plastic. Think twice about the items you are going to buy and think to one's self 'Are these items necessary?' If you find yourself charging an item that is more of a want then a true need then merely put it back on the shelf, and promise yourself when you have actual cash not a credit card, to return and purchase that merchandise for yourself without charging your card. The key here is to establish the difference between wants and needs, your groceries are a need, your gas is a need, the brand new James Bond flick is a want, the brand new pair of sneakers are a want. A oil change for your vehicle is a need, a supercharger for your vehicle is a want.

2. Having Too Many Credit Cards!

This is the next large contributor to people getting into heavy debt issues. People simply just cannot reject the credit card offers they receive in the mail. Debtors get solicited in the mail saying your pre-approved and your line of credit is 5k. For some people this is too much to handle and they will wholeheartedly accept every offer and almost instantly charge on them.

My advice:Ignore these offers, they are only going to hurt you! These offers are not necessary. Think of each one of these credit solicitations you receive in the mail as a little financial time bomb waiting to blow you out of the water. The only way to cut it off is by throwing them right into the trash. Learn to refuse the new credit solicitations you don't need them, this cannot be stressed loudly enough.

3. Cash Advances!

This is a very large factor in people piling up debt. It's to easy to go to the ATM and take out cash against your card. Becoming very addictive to people and becomes a large reason why they accumulate so much debt.

My Advice: Do not use cash advances. This essentially is just about the same as just purchasing on your card, you are still going to be paying interest and rack up debt.