New SaveUp data indicates the 2013 holiday season was a return to expanding credit card bills.
This past holiday season indicates that US consumers are returning to old habits of funding consumption through debt rather than living within their means.
In the November US Consumer Savings and Debt Report 69.7% of Americans reported they planned to use cash for holiday spending. Despite their lofty goals, consumers actually funded the 2013 holiday with debt and entered the New Year with bigger bills. This stands in contrast to the 2012 holiday season when consumers used cash and savings to cover holiday spending.
There are many ways an individual can fall into “debt valley.” And while overspending is often the main culprit, sometimes carrying burdensome or unmanageable debt is unavoidable because of reasons beyond one’s control. Health emergencies, unemployment, changes in a family situation can happen to even the most prudent borrower and spender.
While remembering that “the best defense is a good offense,” keeping yourself out of debt as much as possible is always a better strategy than having to dig yourself out. Here are some tips to help you live a debt-free life:
Credit card debt – it’s something that hangs over many Americans. According to the Federal Reserve, in April 2013 the average credit card debt equaled $3,364 per U.S. adult. This assumes that EVERY adult has a credit card and that those cards carry debt. But young Americans are among those ditching their credit cards, and not all households with credit cards carry a balance each month. The only way to reduce credit card debt is to make payments each and every month. To reduce this even faster you should pay more than the minimum payment each month.
Save Nearly $4,000 by Paying More than the Minimum Balance
By only paying the minimum monthly balance, you are guaranteed to extend the amount of time it will take you to pay off your credit card and increase the amount you will pay.
There is no doubt that Americans are bombarded by credit card offers throughout their day. These applications for new cards appear at retailers, on airplanes, in the mail, and of course, right here on the Internet. So with no shortage of opportunities, credit card users are left with the question: When is the ideal time to apply for a credit card?
After You’ve Done Research
As with any important financial decision, credit card users will want to do enough research to ensure that they are receiving the best offer available. For example, cardholders with debt will want to find a card with the lowest possible interest rate, while rewards card users will seek out the best sign-up bonus, benefits and return on spending.
Some people think that if you pick up bad financial habits in your teens and early adult life then you will always be bad with money, but Cat from Budget Blonde is living proof that people change their financial ways. Keep reading to see how Cat went from broke to budget and lived to tell the story.
College students make money mistakes and that’s ok
Cat wasn’t always a good saver. She admits that she let her credit card debt get out of hand when she was in her early 20s. She was in debt and didn’t have an emergency savings fund to dip into. If Cat could go back and give herself some financial advice in her 20s she would go back and tell herself “not to take out so many student loans and not to rent such a big apartment!”
Our goals at SaveUp are not only to encourage you to decrease your debt and save up for the future, but also to challenge you to do it in a fun way. So we were thrilled to hear from an enthusiastic SaveUp member who is experiencing exactly that.