35% of all Americans have debt in collections. I don’t know about you, but to me that is a shocking figure. When a debt is in collections, it is at least 180 days past due – and this is happening during the “economic recovery” that the mainstream media keeps touting. [While] things are fairly stable for the moment [it begs the question]…”What are things going to look like when the economy becomes extremely unstable once again?”
The comments above and below are excerpts from an article by Michael Snyder (TheEconomicCollapseBlog.com) which may have been enhanced – edited ([ ]) and abridged (…) – by munKNEE.com (Your Key to Making Money!) to provide you with a faster & easier read. Register to receive our bi-weekly Market Intelligence Report newsletter (see sample here , sign up in top right hand corner.)
Credit Card Balances Are Substantial & Rising
In the immediate aftermath of the last financial crisis, many Americans started getting out of debt, and that was a very good thing. Unfortunately, that trend has completely reversed itself over the past few years, and now credit card balances are rising at a pace that is quite alarming.
- The average credit card debt for households that carry a balance is a shocking $16,048 — a figure that has risen by 10% over the past three years.
- At the average variable credit card interest rate of 16.1%, this translates to nearly $2,600 in credit card interest alone – and many credit cards have interest rates much higher than the average.
- Even scarier, consider that based on the average interest rate and a minimum payment of 1.5% of the balance, it would take nearly 14 years for the typical indebted household to pay off its existing credit card debt, at a staggering cost of more than $40,200. Keep in mind that this assumes no additional credit card debt is added to the tab along the way.
Some Credit Card Use Advice
…They don’t teach you about credit cards in high school or in college…so once I got out into the “real world” and discovered the joy of instantly getting whatever I wanted with a credit card, I didn’t understand how painful it would be to pay that money back someday.
If you have credit card balances that are out of control, they can keep you up late into the night. The worry and the fear can eat away at you like a cancer, and many people play a game of moving balances from one card to another in a desperate attempt to stay afloat.
Fortunately, I learned my hard lessons at an early enough age to get things turned around. Now I warn others about the danger of credit card debt through my writing, and my hope is that the things that I share on my websites are doing some good for others that may be struggling financially.
Household Savings Extremely Low
When you are deep in debt, it is exceedingly difficult to build up any wealth of your own. This is one of the primary reasons why 69% of all Americans have less than $1,000 in savings today. In essence, more than two-thirds of the country is living paycheck to paycheck, and that is a recipe for disaster when the next major economic downturn in the U.S. strikes…
We truly are a “buy now, pay later” society. We were the wealthiest and most prosperous nation on the entire planet, and previous generations handed us the keys to the greatest economic machine in world history, but that wasn’t good enough for us. We always had to have more, more, more – and now we have accumulated more debt than any society in the history of the globe.
This Giant Debt Bubble Is Going to Burst
It is inevitable that this giant debt bubble is going to burst. Anyone with an ounce of common sense can see that. What we experienced in 2008 was just a preview of the hard times that are coming. The next recession is going to be even worse, and [nearly 60% of] economists are convinced that it will happen within the next four years no matter who is elected president in November. Just like the last time around, millions of those that are “living on the edge” financially will fall out of the middle class and into poverty when they lose their jobs…
Sadly, most of the country continues to act as if they are living in a pre-2008 world, and the economic wake-up call that is coming is going to be incredibly painful for those that thought they could get away with being exceedingly reckless financially.
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