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Debt Statistics
Pre-approved credit card offers
Ever wonder why you keep getting all those "Pre-approved" credit card
offers - even though you're in debt, thinking of personal bankruptcy or
maybe your credit rating is far from perfect? It has been the trend, as of
late, for creditors to offer their cards to all consumers, especially
those with credit and debt problems in the past. They hope that your past
poor credit habits will force you to spend more money with their card -
and rack up plenty of interest and late charges making personal bankruptcy
look appealing. They'll earn money and you'll be back in financial
turmoil. You're certainly not alone: 1998-1999: The average American
adult received 7 credit card offers through the mail , regardless of their
credit history
Average family credit card debt
You
might be wondering, "I owe my creditors thousands of dollars - there can't be
anyone worse off than me! I need to declare personal bankruptcy!" Check out the
following debt statistic and see how you are not alone. Keep in mind that the
dollar amount is an AVERAGE - that means there are people out there who owe a
lot more than our example: The average family in credit card debt carries a
balance of $4000 on several cards from month to month.
Personal bankruptcy
One indicator of debt in the U.S. is
the number of personal bankruptcies declared each year. While many more
bankruptcies are declared than need to be, this statistic shows how many people
feel their debt burden is more than they can handle and declare bankruptcy:
Personal bankruptcies are at an all time high! In 1999 there were more than
1.354 million declared.
National consumer debt
In many
ways, ours is a nation weighed down by its citizens' (and government's) debt and
bankruptcy debt. National consumer debt and bankruptcy debt reflects many
different factors, so we'll concentrate on consumer credit debt, which accounts
for 50% of the national figure. In 1999, the national consumer debt reached
an all-time high of over 1 trillion dollars. Credit card debt was just as
striking, approximately 565 billion dollars. You can help stop our national
romance with debt and bankruptcy by becoming debt free and learning the skills
necessary to manage your own finances and handle your spending responsibly. Let
US help you get debt free, and along the way, we can show you how to be a
responsible credit consumer.
Other facts:
If you
didn't have your credit card payment of $218 a month, and you instead invested
that money in a 12% savings plan, in 25 years you could retire with
$1,354,930 in the bank. So your credit card payments not only will cost you
thousands in interest, but also prohibits many Americans from adequately saving
for their retirement and makes bankruptcy look like the only alternative.
The average
balance on a credit card is $7,000.
The average
interest rate is 18.9%.
Late fees are
now $29.00, (if not received on the payment due date)
The average
household has 10 credit cards.
Almost half the
households in America report having difficulty paying their minimum monthly
payments, thus making bankruptcy seem like a good alternative.
If your credit
card balance is $8,000, and you make the minimum monthly payment at 18%
interest, it will take you 25 years, 7 months to pay the debt off. You will pay
$15,432 in interest charges, (almost twice the balance), bringing your
total to $23,432.
Americans paid
out approximately $65 billion in interest last year alone.
Last year over
1.3 million Americans filed for Bankruptcy, the highest in our nations'
history, how's that for debt statistics?
Credit card
companies solicit the average American 7 times a year through the mail.
To calculate
your Debt to Income Ratio, divide your debt by your income. (Ex. A person making
$20,000 a year gross income with $10,000 of outstanding debt has a
50% DTI Ratio.) If your Ratio is over 45%, you will be offered higher interest
rates when applying for loans. The lenders will see you as "overextended".
The typical
"Minimum Monthly Payment is 90% interest and 10% principal.
A pamphlet on
"Fair Debt Collection" is available from the Bureau of Consumer
Protection
1-877-382-4357
Click
here to get your free
Debt Consolidation Analysis |
