Average Credit Card Debt - Why Is It High and How You Can Avoid Credit Card Debt?

Are you drowning in debt ? Do you know what the average credit card debt in a typical household is? If you are like a large number of people around the world, you are carrying a balance on your cards. Credit card debt is a leading cause of bankruptcy filings in America today. The American Bankruptcy Institute reported in 2003 that there were 1.6 million filings citing excessive credit card debt as one of the major problems, and that number would only have increased now, given the economic recession the country is trying to reel out of.

Average Credit Card Debt

IndexCreditCards.com estimates that if you average all the credit card debt in the country, it comes to nearly $4,000 per adult and almost $8,000 per household. The media reports that these numbers are down significantly from previous years, proving that economic conditions and smarter consumer spending are beginning to have an effect. Though it may be some time before many can find their way out of the deep holes created by these cards.

Mistakes

Credit cards are not necessarily the enemy, they do serve a purpose and when used correctly you do not have to suffer. There are some common mistakes that people make, largely without thinking when it comes to using plastic. Here are a few reasons why the average credit card debt is so high, and what you should think about before applying for or using them, to avoid digging yourself into such a debt:

* Not paying full balances each month: A good deal of debt is piled on through interest rates and fees. To avoid this, pay your balances in full each month. Paying the entire balance during your grace period will avoid many of these fees.

* Using plastic to make small time purchases: It is tempting to have a night out on the town, go on a little shopping spree, or purchase morning coffee by charging these expenses, but these should be avoided. Do not use cards to make small time purchases, especially for consumables.

* Spending without thinking through the expense: This can cause problems. To avoid this, it is a good idea to log every purchase so that you know precisely where every dime is going. A checkbook register is a handy way to track spending.

Possible Solutions

When consumer debt begins to spiral out of control, individuals begin searching desperately for an answer. Some people owe over $21,000 in credit card debt, and that does not include other personal debts such as mortgage and automobile loans - no wonder the average credit card debt is what it is! If you have found yourself in this position, you may have even considered bankruptcy as a viable alternative. While this may help with your debt, it will do very little to help with your credit ratings. Bankruptcy will stay on your record for up to ten years, and it is a huge black mark - it should be avoided until every other possible recourse has been examined and exhausted.

Bankruptcy of course is not the only option, and many people will choose to roll one credit card into another. This can potentially be an answer to your problems, if you are careful about which offers you accept. Watch the fine print for loopholes that can skyrocket 0% introductory rates, and make your debts even worse.

Conclusion

Revolving debt is not horrible in all cases, but you can run into problems quickly if you are not careful. If credit card debt has gotten out of control you have many options to consider. Take the time to research these options and never jump on the first offer.