Skip to main content

People still getting a charge out of Credit Cards.

Even though we hear over and over in the media, we, as Americans are still charging up a storm. According to a recent Federal Reserve survey, the median balance on Credit Cards in 2004 was 2400 dollars. This does not bode well. This means that many people are losing 240 dollars or more annually, just on credit card interest payments.

There are some bright sides to the survey though. Only 3% of all debt is Credit Card debt. This means that what is often termed good debt: mortgages and college, are much larger amounts. This is important because mortgages are debts that have an a tangible asset associated with them: real estate. In the event that these debts cannot be repaid, at least there is an asset that is available.

Although the increase is somewhat concerning, it is not quite so large when you consider inflation and the fact that over 20% of credit card users pay off their bill each month. This means that many people are using their cards responsibly. The key to keeping our national economy in good shape will be making sure that a few bad apples don't spoil the bunch.

Source: http://www.federalreserve.gov/pubs/bulletin/2006/financesurvey.pdf
Labels:

Comments

Post a Comment

Popular posts from this blog

Do Better With Your Time

Recently, I've been extremely busy with some work commitments. The interesting thing for me is that this increased work activity has really helped crystallize some of my feelings with regard to time. And these ideas are a critical part about my view on personal finance. I'm curious to know if others feel similarly. Time is money. That is, Time, in some way, contains energy. Money, is also energy. In the act of working, I am able to compound and increase the amount of money that I have. I am exchanging my time and effort and thought which are components of my work, for the productivity that I produce. And this production gets me money from my employer. However, the first dollars that I make each day, week, or month are the most valuable. Then the ones that I make at the end are the most valuable. (Forget about taxes for a minute.) The reason is, the first ones help me have a place to live and food to eat. And the last ones are the ones that I can use to really improve my life lo...
3 comments
Read more

Awkward Family Money Situations

I was about to write this as a comment, but its quite long and brings up a ton of issues so here goes. First, check out  <a href=" http://hereverycentcounts.blogspot.com/2007/06/money-and-etiquette-why-are-important.html ">this story at here every cent counts</a>. Now on to my response. I am just mortified by this story. I cannot even imagine that people with kids would expect someone in college to pay for their own dinner. I'm assuming that this is an aunt/uncle/great aunt/great uncle situation and that you are a young college student in late teens, early twenties with no full time job. All of my answers below are based on those assumptions. If that is the case, they should *splurge* the 20 bucks for dinner. They are an adult here and as much as I believe that you should be independent, while you are in college and struggling for money, you should be treated on an occasion like this. Big Question: How do your mom and/or dad and/or other immediate family ...
1 comment
Read more

On Buying a Lifestyle...with a Fixed-Rate Mortgage

Despite all of the back and forth about sub-prime mortgages and the housing bubble, I am feeling just fine. The reason is that when purchasing, I followed some old advice: Don't expect to flip. In general, I've been told by many people that you shouldn't buy a home unless you plan to hold on to it for 7 years or longer. If the market does well and you decide to sell, fine. But if you want to be sure not to lose money, don't buy something that you only want for a year or two. I've been in my current location for more than 3 years. I like it. And I have no intention of leaving in the short or medium term. It seems to me, that real estate, like any asset class, has its ups and downs. But as a practical point, I don't look at my home as an asset per se. Rather, I consider it to be a fixed expense that I need to survive, much like food and water. Therefore, as long as the payment is reasonable and it functions to keep me warm and sheltered and comfortable, that is a...
Post a Comment
Read more