Americans have staggering amounts of debt; it only stands to get worse
If you're like most Americans, you owe a lot of money to a lot of people. In years past, credit was hard to obtain, and if you needed cash, you had to go to the bank and try to obtain a personal loan. That may or may not have been possible, depending on whether you knew your banker well or not.
Today, things are different. Thanks to credit scoring and automated tracking of spending habits, creditors are willing to lend money and lend it both quickly and often. And Americans have jumped on the bandwagon in record numbers to incur debt in every way possible.
.We owe money on credit cards. Lots of it. The average US household has NINETEEN different credit cards and a total outstanding average balance of just under $10,000. That amount has more than doubled in the last decade, far outstripping increases in salary. What possible reason could anyone have for needing nineteen credit cards?
More often than not, these cards include more than one of a given type, such as multiple Visa or Mastercard accounts, for example. What happens when we own so many cards? We fail to pay our balances. In the last quarter, credit card delinquencies reached an all-time high, with nearly 5% of all customers missing payments.
We're buying more expensive homes than ever, but we're not investing more in them. Many, if not most, buyers are now taking out risky loans that require little payment of principal, such as Option ARM loans or interest only loans. We're not buying more house; we're just buying more debt. What's the result of this? Foreclosure rates are beginning to skyrocket, as buyers realize that they have signed on to more house than they can afford.
We're spending it on cars. The auto industry will sell more than twenty million cars this year, a high not achieved in nearly 20 years. And the average car loan now exceeds five years' duration, with many running seven or eight years. When was the last time you or anyone you know took out a three year car loan?
The bottom line - As a nation, we're up to our eyeballs in debt. We owe too much on credit cards, too much on our houses and too much on our cars. And it's catching up. As the deadline for the new bankruptcy law approached, record numbers of people were filing for bankruptcy and attorneys reported that they were actually having to turn down business due to the incredible volume of calls.
When attorneys are so busy that they can't take a call from a bankrupt consumer, we've got a problem. We could be on the verge of a recession, or even a full-fledged depression if the housing market collapses.
What to do? We've got to start saving money again. Now.
Talbert Williams offers debt consolidation referrals and advice. For more information, articles, news,
tools and valuable resources on debt solutions, visit this site: http://www.1debtfreedom.com
About the Author:
Talbert Williams offers debt consolidation referrals and advice. For more information, articles, news, tools and valuable resources on debt solutions, visit this site: http://www.1debtfreedom.com
