wishing they had the ability to raise their personal debt ceiling
Los Angeles, CA (PRWEB) July 27, 2011
Across the country, many Americans are barely hanging on. Americans are predicted to hold $1.177 trillion in credit card debt in 2011; and one in seven Americans hold more than 10 cards. To help illustrate the looming personal debt ceiling crisis, CreditDonkey recently published an infographic analysis on Just How Much Do We Need Our Credit Cards.
With the U.S. government facing a national debt ceiling crisis, eyes are on Congress to see what actions will be taken to ensure the government can uphold its financial obligations, like Social Security and Medicare benefits, military salaries and interest on the national debt. The August 2 deadline is looming over the government - decisions must be made fast.
According to a fact sheet released by the U.S. Department of Treasury, Congress has acted 78 separate times to permanently raise, temporarily extend or revise the definition of the debt limit.
"Many Americans who are following this national finance story probably are wishing they had the ability to raise their personal debt ceiling," says Charles Tran, founder of CreditDonkey. "With the housing bubble burst and economic recession of recent years, many Americans are feeling the pressure of their increasing debt."
While consumers aren’t able to arbitrarily raise their debt limit (unless they have amazing salary negotiation skills), the folks at CreditDonkey have shared the following tips to help Americans keep themselves from getting overwhelmed by debt.
- Keep track of your debt—Knowledge is power; especially when it comes to debt. When consumers don’t know what they owe, it’s easy for them to slowly slip more and more into debt.
There are several free financial management websites now available to consumers to help combat this problem. These sites help consumers keep track of what’s coming in and what’s going out of their banking accounts. By enrolling in one of these free programs, consumers are able to see exactly what they owe each month.
- Pay on time every time—Making payments on time each and every month is critical when it comes to managing debt. Being late not only damages a consumer’s credit score, which makes it more difficult to qualify for future loans, but it also results in late fees. These fees can really add up and will just add to the amount that is owed. Being late on credit card payments can also result in a higher annual percentage rate (APR). The higher the rate, the more a consumer will have to pay in interest.
- Take advantage of refinance offers—Refinancing an auto or home loan can help decrease monthly payments. When auto and home loan payments are lower each month, consumers are able to put more money toward their credit card debt.
If a consumer isn’t receiving preapproval offers in the mail, it doesn’t necessarily mean they won’t qualify for a refinance loan. Credit unions typically have less strict lending policies, so if a consumer is looking to save money on their monthly payments, they can contact their local credit union to see if they would qualify for a refinance loan.
- Be responsible with credit card usage—Credit cards are great tools… when used responsibly. With the advent of credit card rewards, many consumers are using the rewards as an excuse to charge an increasing amount of purchases to credit. This doesn’t necessarily have to be a problem. However, it can be easy to go overboard, charging more to the credit card than can be paid at the end of the month.
The best rule of thumb when it comes to credit cards is for cardholders to limit their purchases to an amount they can easily pay off at the end of the month. If a cardholder wants to make the most out of their rewards program, they can use their credit card to pay their monthly bills instead of using rewards as a validation to go on a shopping spree.
- Look for credit cards with balance transfer offers—Consumers who have existing credit card balances can help lighten their debt load by completing a balance transfer to a credit card with a lower rate. No, this won’t eliminate the total amount owed but it will decrease the amount they will ultimately pay in interest, potentially saving them hundreds of dollars over the life of the outstanding balance.
Consumers can visit http://www.creditdonkey.com/ for analysis and more tips to stay afloat in these trying times.
CreditDonkey is a credit card comparison site that publishes credit card research, informed opinions and related news/trends that empower American consumers to make informed credit decisions.