Credit Card Debt? What Credit Card Debt?

I was catching up on my daily finance news today and it appears that Americans are doing pretty well for themselves in terms of eliminating their credit card debt. According to the news, the average such debt fell to $4,951 from %5,719 from a year ago. It means that more people are aware of their debt and making their payments on time! Perhaps, financial blogging sites, such as Money Green Life, have contributed to the success of helping people eliminate their debt. I believe that decreasing debt is virtually the same equivalence to saving money. They both will ultimately help you increase your overall net worth. When you save money or decrease your debt, your net worth naturally goes up, the outlining motto for Money Green Life.

So, what have Americans done right to help themselves decrease their credit card debt? The answer to this question is obvious and simple.

More borrowers made their payments on time. This is key. If you don’t make your payments on time, late payment fees on top of the interest fees are accrued and add on to your overall debt. By paying on time, you avoid such late payment fee.
People are spending less and borrowing less. With the current economic condition, people are becoming aware that they need to be more frugal in their spending to survive. They’re also borrowing less money because of the same reasons. On top of that, banks aren’t really lending as much as before, such as home equity line of credit loans.
Home foreclosures, ironically have also contributed. When people don’t make their home mortgage payments, they have a sudden cash boost, allowing them to make extra payments on their credit cards instead. Sounds pretty silly, but for short-term solution, this has been the case for many Americans.
If you have fewer overall credit available by carrying less cards, then the likely outcome of that is to spend less. Credit card applications have decreased drastically over the past year, forcing Americans to depend more on their cash than credit.

Personally, I have never carried a balance on any of my three credit cards. Carrying a balance implies that you’re spending more money than you can afford. When you spend more money than you can afford, it usually leads to debt. Some people just can’t help it and they will be in debt no matter what they do for the rest of their lives. So, if you carry credit card debt now, transfer your balance to a new 0% balance transfer credit card, and try spending less money. Then you’ll be on your way to having a positive overall net worth.