Welcome back! Today is Day 3: Credit Card Debt
Credit cards have a bad reputation, and rightfully so. There are some really shocking and disturbing stats about credit cards:
- 60% of Americans have a credit balance that they cannot pay off with their current income
- The average American owes $6,000+ on their credit card
- The average credit score is 695
- The average number of credit cards an American has is roughly 4
Stats found in an article from USA Today and ValuePenguin.
Maybe credit card debt has been something you’ve struggled with on your financial journey. After all, credit cards can feel like ‘free money’. However, the good news is that credit cards are not bad when used appropriately.
To help you face your credit cards we will cover these areas: how many credit cards you have, total credit card debt, credit score, and types of credit cards.
Let’s do this!
Credit Card Count
Do you have one credit card? Five? Ten? Do you have credit cards form department stores, auto mechanic shop, beauty companies? Those are just the places that have offered me a credit card in the past few months.
Credit cards are not just available through banks. Many companies now offer credit cards for their businesses. Think about it. Have you ever gone up to a register and been told that you were ‘pre-approved’ for a credit card? If you ended up taking one out, that counts as a credit card.
So, count up all your credit cards, even the ones you no longer use.
Total Credit Card Debt
Once you’ve counted up the amount of credit cards you have, separate each credit card and determine how much debt is on each card.
Then add up the total so that you know how much your overall debt is.
If credit card debt has been an issue for you, cut your unnecessary cards. It’s best to remove the temptation so that you can be closer to your goal of financial freedom.
It’s so easy these days to check your credit score. If you have online banking, you can typically check there for free. There are also other free options such as Credit Karma. It’s good to be aware of your credit score at all times so that you know what your credit health looks like.
Credit Card Type
An important factor to success with credit cards is picking the right card for your situation. There are many cards on the market, but not every card has the same benefits and interest rates. Some cards to pick from include:
- Reward system cards
- Cash back cards
- Travel reward cards
It’s good to shop around for the card that’s best for you and your situation.
Tips for Success
- Pay your bills IN FULL each month in order to avoid interest rates and get the most rewards.
- It’s better to use one card rather than rack up debt on multiple cards.
- Never ever skip a payment.
- Be aware of interest rates.
- Use. Your. Rewards.
- If you can’t trust yourself with credit cards, use cash.
Credit cards are a tough task to face because many people rely so heavily on them. Once you have completed today’s tasks, you will be ready to move on to tomorrow tasks: budgeting.
THE LIFE HUNT
My name is Alyssa Hunt and I help busy hustlers work toward their dreams of business success and financial freedom all while managing full-time jobs and daily distractions. Let’s do this!