How To Avoid Debt Traps

HOW TO AVOID COMMON DEBT TRAPS 1) Don't Apply for Credit You Don't Need: In the past, it was simply too easy for consumers to obtain access to credit. Consumers took advantage of the low interest rate credit cards, subprime loans, jumbo mortgages, and other forms of costly debt. Sometimes the cost of debt was too high for them to pay back. The recent economic crisis and government regulations have led creditors to start restricting their lending practices. However, consumers shouldn't depend on the Credit CARD Act or the banks. Using credit wisely starts at home. 2) Stop Buying on Impulse: Having credit cards has made it too easy for consumers to buy on impulse. It's instant gratification. They see it, want it and buy it without even looking at how they're going to pay off this new purchase. Don't live in the now, look at your financial future. Before pulling out the credit cards, make sure there's a budget to pay off this new purchase. 3) DRIVER'S MANUAL Get Yourself an Education in Finances: Personal finance isn't a priority in schools. Most consumers learn about managing their personal finances through trial and error. It's this lack of understanding and awareness that can lead to poor money management and financial mistakes. Getting an education in personal finance isn't costly; many of the resources are available at libraries and online for free. 4) CHEAP HARRY'S AUTO SHOP FIX IT RIGHT AUTO SHOP Take Care of Your Debt Problems: Consumers have been quick to blame the banks for being "greedy," when the economic downturn occurred. However, consumers have also played a part in this economic crisis by accepting credit and debt that they were unable to pay back. Rather than letting your accounts fall into default or seek a quick debt fix that will harm your credit, find solutions that will help you take care of your debt without trashing your financial future. CHEAP HARRY'S AUTO SHOP FIX IT RIGHT AUTO SHOP 5) DANGER ROAD CLOSED CLIFF The American Dream Doesn't Include Debt: Just two generations ago, America was a nation of mostly thrifty people living within their means, even setting money aside for unforeseen expenses. However, with the access of easy credit and "shop til you drop" retail advertising American mindset has changed, and now Americans are carrying on average $16,007 in debt. It's time to get back to your American roots and make saving money in fashion again. Sources: nytimes.com/2008/07/20/business/20debt.html creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php creditcards.com/credit-card-news/credit-card-law-interactive-1282.php alastairmcintosh.com/articles/1998_usury.htm wisebread.com/the-debt-trap-factors-that-have-led-us-to-our-debt memgenerator.net knowyourmeme.com