Monday, July 30, 2007

What is the average credit card debt?

When you see an article headlined "The big lie about credit card debt", you have to read it. So I did, and it was interesting. It points out some flaws in the polling system used to calculate credit card debt. The average credit card debt, they say, is $9,300. That does sound pretty high.

What is the real figure? Well, I don't know personally. The article didn't convince me that their method was any better. $2,000 is believable, but then again so is $9,000. I'm not sure what to believe, and I'm not sure it really matters. All that is important is that we are not carrying balances and have no debt. Is comparing ourselves to other's debt any different than comparing the kind of cars we drive, or what features our houses have? If we feel like having $3k in revolving debt because the average is $9k, isn't that "keeping up with the Jones'", and isn't that just as bad?

A fascinating topic would be the average debt, not just card debt. Including mortgage, and especially including car and home equity loans. I have a feeling if we looked at the average auto loan debt and evil home equity loan debt, we'd have a staggering number. Especially when you think of how many people fell for the scam of rolling your debt into a low interest equity loan. When it comes to reducing debt (and your monthly payments) there is only one sure fire way, and that's paying it off!

Swapping money around and consolidating and doing any other "quick fix" scheme is only putting a candy coating on your big fat debt. I say lay it all out, add it up and stare at that number until, like I did, you loath it. When you can finally say "I hate you, and I'm going to pay as much as I can to be rid of you forever," that's when debt repayment really starts to work.

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