As Americans, are we addicted to overspending? According to the Trend Hunter Website, about 52% of Americans spend more money than they earn. More than 21% overspend on a regular basis. This is really shocking. Who is at fault for this? Why is this such a big issue in this country? How can these issues be resolved?
The problem is that there is no one solution for this problem. Many people are got-to-have-its, meaning they are always buying the latest and greatest gadgets, electronics, even vehicles, to keep one step ahead of their families and friends, even if what they already have is perfectly good. In some cases, it is because people are simply not educated enough about spending, they dont realize what a credit card is really about. They dont realize that a credit card isnt real money, and they have to pay this credit back sooner or later. They often max out their cards, and find they simply cant pay it off, or end up stuck in the endless cycle of paying minimum monthly payments.
Who is at fault? This is not an easy question to answer either. In many cases, especially when it comes to the younger generation, they simply were not taught about credit. Their parents often kept their financial situation tight lipped, and didnt take the time to sit down with their kids and discuss finances, credit cards, and budgeting. Although they may be thinking that it may be too much of a burden for their kids, they really arent doing them a service by not explaining these things to them.
Another problem is that while it doesnt happen as much as it used too, still there are many credit card companies targeting people, especially the younger generation. Even adults can be bombarded by companies, getting dozens of applications a month from different companies wanting to offer credit. There are many enticements, too many to mention them all here. Some of them say you are preapproved for thousands of dollars. Others state that you have zero percent interest, no fees, and many others. The problem is that many people neglect to read the fine print. Usually that zero percent interest is for a limited time, then your APR may be 19% or more. Sure you may have no fees, for a year, then after that you have to pay for your card every year. Even worse, this no fee policy doesnt include over limit fees or late fees, which can add up quickly.
While it is easy to get into debt, getting out can be another matter. Some people manage to do it on their own, vowing to pay down these cards, setting up a budget and sticking to it, cutting up the cards they do own, etc. It takes time, and it can be frustrating. The more in debt you are, the harder it can be to get out of it on your own. For these people, it may be easier to find a good credit debt reduction company to help you. These are also known as credit counseling services. The problem is that not all companies are the same. Some charge a lot of fees, others are more of a debt consolidation service, which is not what you need. They take your money, then wait to pay off these credit cards in small doses. What you need is a company that is going to act on your behalf, contacting your creditors, getting your interest rates lowered, your fees waived, and even getting your total debt reduced if you can pay off the debt in one lump sum, or fixed payments over a period of time. Most importantly, a good service is going to educate you on budgeting, and not spending more than you have, so you dont find yourself in this situation again.