The Debt and Stress Response

July 8, 2004 -- -The average household has over 10 credit cards
-The average credit card interest rate is 19%
-The minimum payment on a credit card is typically 92% interest & 8% principle
-Americans paid out approximately $65 billion in interest alone last year
-1 in 50 households file bankruptcies each year

Stress from debt is one of the leading causes of divorce, suicide, and family violence. More people are afraid of financial problems than are afraid of death.

The Federal Reserve is reporting that, on average 22.1% of a household's wages and salary are committed to paying the debt service. When approximately a third of income goes to taxes and an average 22.1% of income goes to making payments on interest, just keeping up with minimum payments can be stressful. As consumers get behind on bills stress builds. Creditors increase the stress by calling consumers at work. Making matters worse, balances will continue to rise with late charges and over limit fees accruing. A person's situation can turn from good to bad in a matter of months.

"Unfortunately in one generation we've become a society of debtors and that equates to a society of stressed-out people," says Credit Advisors Foundation President Sam Hohman.

Hohman believes it is important to spot financial crisis and get control of the situation in the beginning because the consequences of debt delinquency could be detrimental and cause even more stress: collection calls and letters, increased fees and charges, revocation of privileges, damaged credit report, repossession, collection agencies, legal action, and bankruptcy.

Credit Advisors offers some simple ways to avoid the stress from debt: learn all you can about credit and debt, complete and use a budget, set goals and an action plan to accomplish, and admit you don't know everything (Get Help!).

Take this helpful debt quiz to see where your financial situation stands.
-Do you find yourself living from paycheck to paycheck with no breathing room?
-Have you struggled trying to pay off two or more credit card bills?
-Are you unable to put aside any of your salary towards savings, investments, retirement, or college funds?
-Have you been crushed by the weight of a new car or hospital bills in addition to your credit card bills?
-Have you received calls from creditors or collection agencies regarding overdue payments?
-Are money problems causing undue stress or conflict in your home?
-Have you borrowed money from one credit card to pay another?
-Have you been charged for late payments or failure to make payments?
-Are your interest rates above 8%?
-Have you considered filing for bankruptcy?

To be truly financially free you should be able to answer no to all of these questions.

Contact Credit Advisors Foundation 402-393-3100 www.creditadvisors.org




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