Wall street journal
report that, Americans’ debt grew in April as credit-card use surged, a sign of
a rebound in consumer spending after a sluggish winter.
Outstanding consumer
credit—reflecting Americans’ total debt outside of mortgages—rose by a seasonally
adjusted $20.54 billion in April, or at a 7.33% annual rate, the Federal
Reserve said Friday. Debt jumped 7.66% in March. Economists surveyed by The
Wall Street Journal had expected consumer debt to rise $16 billion in April.
The latest increase
reflected a sharp rise in revolving credit, reflecting mostly credit-card debt,
which increased at an 11.57% annual rate. That marked the second- biggest jump
since the recession ended nearly six years ago.
Meanwhile, borrowing for
cars and education grew at the slowest pace since July 2012. That
category–so-called non-revolving credit—expanded at a 5.8% rate in April after
growing 8.05% in March.
Consumer spending
accounts for more than two-thirds of economic output in the
U.S. When consumers rein
in spending, as they did in the first three months of the year, the economy
typically slows.
Economists typically see
a pickup in consumer debt as a sign Americans are gaining confidence and feel
more secure.
But the growth could also
be a sign money is tight for many households and they have few other options
than to borrow.
The latest pickup in debt
comes amid steady job growth and early signs that
Americans’ incomes are
growing at a slightly faster pace after years of stagnant wages. Americans
are also saving on gasoline,
compared with a year ago, after a dive in oil prices from mid-2014.
You may also like: TOP 3 "Expert" Advice On Shopping;That Will help You To Cut Down Your Spending By 50 Percent
Credit Cards Do's and Dont's
1- Stop all
your credit card and keep only one for emergencies. Always use cash instead.
And for the one you keep, be sure to choose one with the lowest interest rate
and best credit facilities. If you search you find. If you are a student, look
for student plans with zero monthly fees and very low interests and also a low
renewal fee.
2- If you have
multiple credit cards, transfer the debts to the card with the lowest interest
rate or get a debt-consolidation loan from a bank at a very lower rate.
3- Use cash!
And buy what you really need only!
4- Pay off the
debts with the highest interest rate first.
5- Add an
extra payment on the next debt by taking the payment you made on the first debt
and adding it to the current debt.
6- Always have
you notepad or PDA with you and invest in personal finance software to track
your spending.
Search the web
and you will find great software for competitive prices. Also invest in
debt-reduction software, it will help you calculate and create a debt reduction
plan.
7- Use
consumer credit agencies to arrange repayment of debt. Many are free.
There is a lot of truth in the advice that credit cards are not a
substitute for not having money. Every time you use a credit card this should
be the theme replaying in your mind.
And you would do good to remember the following too.
Do s.
* Always plan for the purchases that you need and those that you want. You
need the essentials, and you want everything else. The ability of making a
distinction might help you plan wisely.
* If caught up in financial difficulties, it’s always good to talk to the
issuer who might re-schedule your payments. If you simply default, that only
helps to build up an unfavorable credit history and you might find yourself
being denied credit next time.
* Unless it is an emergency, staying within your credit limits will help
you a great deal. If you must spend over the limit, ensure you are within the
manageable levels, say within 30 percent.
* And if your mails are flushed with more favorite deals than you currently
are enjoying, you may approach your issuer for a better deal. They want to
retain you as their customer, so they will listen.
Dont s
* Do not use your credit card to make house hold purchases. It’s expensive
in the long run
* Do not just pay the minimal amount. You will end up paying exorbitant
interest. The quicker you clear the debt the better.
* Do not use the credit card to purchase things you can’t afford.
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