A new report has recently found out that one among four Americans can face a full financial crisis due to an unanticipated expense. There are some age groups that are more at risk than some others. Although there are more than one sign that is pointing to a surefire US economic recovery, it is being seen that the Americans are continuously struggling with their credit card debt and lack of savings in their emergency funds. Neither are they able to eliminate their debt nor are they able to build enough saving that can help them during their emergency situations. These are the two areas where the Americans are continuously meeting with failure. What is the reason behind this? Are they themselves responsible for this situation?
The particular age group which is more likely to have credit card debt than savings is the one that ages between 30 and 49 as they’re the ones who deal with the cost of homeownership and raising children. All those who are least likely to owe debt are the senior citizens over age 65 and the millennials who are already too tired with their student loan debt, let alone take on more debt on their credit cards. However, the good news is that there are a number of Americans who have more emergency savings than credit card debt. Experts recommend having an emergency fund that could effortlessly cover 3-6 months of basic expenses. That goal might seem to be intimidating but you can certainly start off with a smaller target.
Credit card habits of successful people that you should follow
Did it always seem that the rich are different from most of us? Did you wonder the way they handled money? Do they handle credit cards in a different manner? There have been many researches about the ways in which rich people handle their credit cards. If you too are striving to lead a debt-free life, you may also follow some of the habits followed by the successful and wealthy people.
- They handle fewer credit cards: According to a research, it has been found out that 8% of rich people used more than 1 credit card while 78% of the poor people did the same. So, this clearly means that the successful and the rich people use only 1-2 credit cards. They’re intelligent enough to not spread their expenses and spending around a number of places. The more are the number of credit cards that you use, the more money haze you fall in. The wealthy people realize this.
- They pay off the entire balance every month: While 90% of poor people carried balance from one month to another, only 4% of the rich people did the same. In fact 85% f the poor carried balance amounting to more than $5,000 while only 5% of the rich people had large balances. They most likely are aware of the fact that credit card debt is expensive and that one can improve his credit score without high interest debt. There’s however another explanation that since the rich have more disposable income, they pay off their bills in full and the poor carry their debt since they don’t have enough income to pay them off.
- They pay off their balance on time: Did you know that 68% of the poor had at least a single late payment in 2014 while none of the rich had done this mistake? Once again this can be a consequence of having enough cash flow on time but sometimes this is also a matter of developing the habit of paying off your balance on time. Such a good habit pays off on time and in different ways. Cardholders usually try to avoid expensive late fees and they build high credit scores which in turn helps them grab loans at low interest rates.
- They keep a track on their credit score: Anyone, whether rich or poor is entitled to take out a copy of their credit report from all the 3 credit reporting agencies once a year. So, you being a poor person don’t give you the excuse of not keeping a track on your credit score. According to the survey, 77% of the rich knew a lot about their credit scores while 5% of the poor did the same. By knowing the credit scores, the rich can take advantage of some of the best deals in the market. They’re even able to spot cases of identity thefts, if they’ve been a victim of any such misfortune.
Apart from all the above mentioned habits, even if the wealthy fall in debt, they seek help b either taking out a credit card debt consolidation loan or by getting help from a credit counselor. You can also follow them in order to be rich and successful cardholders.