Debt Facts

• The typical American spends $1.22 for each dollar they earn.


• The average interest rate for credit cards in the United States is 13.4 percent.


• Consumer Debt exceeds the National Debt.


• 24% of the bankruptcies filed last year, were filed by people that are only 25 years old and younger.


• 65% of all credit card accounts have only the minimum payments amounts being made by consumers.


• If your credit card balance is $8,000, and you make the minimum monthly payment at 18% interest, it will take you 25 years, 7 months to pay the debt off. The total amount of your payments will be $23,432.


• The typical Minimum Monthly Payment on a credit card is 90% interest and 10% principal.


• The personal savings rate in the United States has dropped from 8 percent in the 1980s to less than 2 percent since 2000.


• Medical debts are the cause of one in every 20 bankruptcies.


• Credit Card late fees are now $35.00.


• Those who graduate with college debt are more likely to live paycheck-to-paycheck.

Debt is overwhelming and most find it hard to get a plan in place to eliminate their debt. The most important thing to remember is that getting out of debt takes time, persistence and dedication to a good debt free plan.

Dave Ramsey recommends using the debt snowball plan. First thing this plan recommends is getting $1000 in an emergency fund. Once that is done you will focus on paying down and getting rid of debt.

On this plan you will make the minimum payment on all your debts except for the one with the lowest balance (payoff amount). The theory is that paying off the little debts first gives you instant results and more money to apply to the other debts. You will need to list your debts in order of smallest to largest payoff. Work your way through paying them off in that order.