Drowning in Debt
How many days has it been since you received an offer for a new credit card? If you're like the average American, U.S. families are literally drowning in debt.
Consider the following:
- There were roughly five billion credit card offers mailed to approximately 200 million Americans in 1991. That's an average of one credit card offer per week.
- Each cardholder has, on average, eight credit cards.
- As of September 2001, the average outstanding credit card balance for households with at least one card was $8,562.
- Nearly 18 percent of all consumer goods are purchased with bank credit cards. Include retail credit cards and debit cards and the number rises to 24 percent.
- There are nearly 500 million consumer bank credit cards (VISA, MasterCard, Discover and American Express) in circulation and about 700 million retail and other non-bank issued credit cards.
- Of the 281 million people in the U.S., approximately 185 million of them use credit cards.
- There are 110 million households in the U.S. If you divided all the credit card debt among them, the average debt per household would climb $6,000. If you exclude households with no credit cards, the average debt tops $8,000.
It's obvious why banks spend so much time and money marketing their credit cards to consumers: We like our €śstuff. €ť Americans tend to €śbuy now €ť instead of waiting to buy with cash in hand. And just when you think you've reached your limit, the bank notifies you that, €śbecause you've done such a good job managing your credit (read, maxed it out), we're going to raise your limit! €ť
Eventually, debt may lead to bad credit ratings, or worse, bankruptcy. However, not all bankruptcies can be attributed to credit card abuse. College loans, hospital bills, mortgages and any number of unexpected bills can leave a family penniless. Regardless of the cause, about 25 percent of the adult population has some history of credit problems.
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