Let’s talk about credit card debt. Although I will focus on older Americans – because I am one – the information is important to everyone.
That little plastic card can solve problems, or make them. It can create remedies, or it can cause financial illness.
The older generation was trained to keep quiet about money problems. It was a personal problem, kept within families. Money – or the lack of it – was treated like a clackity old skeleton in the closet. As a result, many of us thought we were the only ones that were fighting to keep a little month at the end of the money. My parents handled budgets and made their ragged financial ends meet, and taught me to balance a checkbook and squeeze every penny along the way.
Americans over age 50 now carry more credit card debt than younger adults, according to a 2012 national survey, middle-income Americans age 50 and older now carry more credit card debt than younger people – a reversal of the survey’s findings in 2008. Older Americans have an average combined balance of $8,278, compared to an average of $6,258 for younger groups (my credit card balance hangs somewhere in the middle). Nearly a fourth of those surveyed said that job loss contributed to their debt, and half said that car repair and related expenses also had increased their balances. And 23 percent said they used their credit cards to help or pay off the debts of other family members.
I have been transparent about my own credit card debt on Cash Crone, because I want to learn from others, and help others in my own financial journey. Compared to some, my debt is small, but it still affects my credit score and my ability to create a stronger financial future. I am working steadily to reduce those balances. Sometimes I’m a turtle – I have realized that I am not physically able to work the number of hours I used to work in my 30s. I am the only person in the house, and since my faithful dog (whom we will call Sweet Penny Purebred) has never earned a paycheck in her life, I have to think smarter and create more opportunities for passive income (Cronies, now is a good time to subscribe to Cash Crone, as my money goals will take a crazy turn in January – stay tuned!).
Here’s what you can do to begin to reduce your credit card debt:
- Face the facts. Take a good hard look at your own credit card debt. Really. Don’t just look at the minimum payment, people. Look at that big number listed under the word “Balance.” Add all your credit card balances together, and step back.
- Check the receipts. Look back at your statement. Understand where you are out of control in your spending, and make a list of them. If you see a lot of charges for restaurants, or clothing, you can begin to see your spending weaknesses. Then, say to yourself, “I own this balance. It is going to be okay.” Because it is. Now you know better, and now you will do better.
- Double check the receipts. Make sure your charges are valid, and that no one else had accessed your account or made charges without permission. If you find a charge that you cannot recall, call your credit card company to get more information. If it is definitely not your charge, ask to dispute the amount. And make a new habit to check your statements every few weeks. Last year someone ordered concert tickets using my card number, but I caught it immediately and had the charge taken off the card.
- Talk about your debt with your family and friends, and explain that you have had enough of the rat race, and the Joneses, and the social media or advertisements that tell you how great your life will be when you have that particular widget.
Tell them that you have a new money mindset. You are wiser, and have the willpower – and you will create wealth.
- Come up with a plan of action. Again, face the numbers. You should budget a certain amount of money each month to play, and don’t spend more than the amount that is allotted. Look for free or low cost entertainment options.
- Face the boulder of debt, no matter how big or small, and start today to chip away at it. Every penny, every check, takes a chunk out of that debt and makes it easier to handle. Before you know it, you’ll have a clear view all the way to the stars.